Summary

The indications given by the latest data on the external background of the Portuguese economy in the second quarter are less favourable. The GDP was up by 1.6% in the second quarter, less 0.4 percentage points (p.p.) than in the first quarter, reflecting mainly a slow down of exports. External trade data, with preliminary results up to June, showed a deceleration of 5.3 p.p. in the value of exports and an acceleration of 2.4 p.p. of imports on the second quarter, compared to the former quarter. Nonetheless, exports maintained a higher growth rate than imports (6.2% and 4.0%, respectively). Domestic demand registered some acceleration in the second quarter, mainly due to the evolution of investment. In spite of growing in a less dynamic way than investment, the private consumption should have slightly accelerated due to a more intense growth of the durable goods that more than compensate the deceleration of non-durable goods. The information already available for July points to the same opposite behaviours. In the second quarter, employment diminished 0.5% year on year after a slight positive growth in the previous quarter. The unemployment rate was 7.9% in the second quarter, more 0.6 p.p. than in the second quarter of 2006 (in the first quarter of 2007 unemployment rate stood at 8.4%, more 0.7 p.p. than in the same quarter of the previous year). Inflation was 2.4% in July, the same value of the two previous months.