According to official data released on Thursday, Portugal's economic growth accelerated to 1.5% in the fourth quarter, pushing its total expansion for the year to 1.9%, slightly surpassing the government's forecast. The National Statistics Institute (INE) reported that gross domestic product increased by 2.7% in the quarter compared to the same period last year, a significant jump from the revised 0.3% growth seen in the previous three months. INE attributed the strong growth in the fourth quarter to an "acceleration of private consumption."
The yearly growth rate slightly exceeded the government's projection of 1.8% and was down from 2.5% in 2023. Compared to Portugal's European neighbors, notably [mention some neighbors here], the country's growth was notably robust.
Private consumption, a significant component of Portuguese GDP, received a boost from tax cuts for families and businesses, as well as increasing wages and pensions, according to INE. Notably, the contribution of exports of goods and services, including the thriving tourism industry, remained negative due to stronger growth in imports compared to exports.
Filipe Garcia from Informacao de Mercados Financeiros highlighted that domestic demand, especially private consumption, played a crucial role in driving the Portuguese economy forward, fueled by increases in disposable income, tourism, and employment. He also noted a 1.5% increase in total employment in 2024, with employee numbers growing impressively by 25% since 2013. Garcia emphasized the importance of immigration in Portugal's growth, cautioning that any changes in this area must be handled carefully.
The forecast projects the economy to grow by 2.1% this year.