Tuesday, March 2, 2021

GDP drop was “much less” drastic than expected

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The Minister of State, Economy and Digital Transition, Pedro Siza Vieira

The Economy Minister said today that the 7.6% drop in GDP in 2020 was “much less” drastic than anticipated, which gives confidence for this year, despite the expected “great difficulties”.

“In the year as a whole, we had a very significant drop of 7.6% in relation to 2019, but even so, much less drastic than what all the institutions were anticipating and even than the Government’s own projections ”, said the Minister of State, Economy and Digital Transition, Pedro Siza Vieira, in reaction to the data released today by the National Statistics Institute (INE ).

These data show a 7.6% contraction of the Portuguese Gross Domestic Product (GDP) in 2020, after a 5.9% contraction in the fourth quarter.

“At the beginning of 2021, a year that presents itself, at the same time, as a year of hope for our growth, but also of great difficulties inherent to the growth of this third wave of the pandemic, these data are a source of confidence and allow us to continue to appeal to the mobilization of companies, of the workers, in order to ensure that we go through this difficult period in the best possible way ”, added the minister.

Regarding the performance of the economy in the last quarter of 2020, the INE data show an increase of 0.4%, “the best performance in the whole euro area, compared to the countries that are already known”, highlighted Siza Vieira.

“What explains the behavior of the economy in this last quarter was precisely the best performance of investment and net external demand”, he pointed out, stressing that Portuguese companies “continue to show competitiveness and an ability to continue investing, despite the difficulties ”that the pandemic has raised.

The Economy Minister also referred that the data known today are “consistent” with the employment data, released last week, and, he said, “show that the measures to support the economy and employment have been working so far”.

The Ministry of Finance has also responded to the figures put forward by INE, noting that the second half of 2020 “Better than previously anticipated”.

“Economic activity performed better than previously anticipated in the second half of the year, with a 5.1% growth compared to the first half,” said Finance in a statement today sent to newsrooms to comment on the GDP drop of 7 , 6% in 2020.

In the document, the minister’s office João Leão it also highlights that, “despite the sharp drop in GDP, the evolution reflects an improvement compared to the forecast presented by the Government in the State Budget for 2021 (8.5%)”.

According to a quick estimate released today by INE, “the year 2020 as a whole, GDP contracted by 7.6% in volume (growth of 2.2% in 2019), the most intense in the current series of National Accounts , reflecting the markedly adverse effects of the covid-19 pandemic on economic activity, ”reads a note released by the statistical institution.

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