Summary
Accordingly to the flash estimate published by EUROSTAT, the GDP year-on-year growth rate for the Euro Area (EA) in the 3rd quarter of 2008 was 0.7%, 0.7 percentage points (p.p.) less than in the previous quarter. This evolution was driven by the slowdown observed in most of the EA main economies. Weighted by the structure of the Portuguese exports, the GDP of the main costumer countries might have decelerated 0.9 p.p. to 0.7%. In the EA, the economic sentiment and the consumer confidence indicators extended in October the downward movement observed since August 2007, showing the effects of the latest developments in the international financial crisis.On the domestic side, the GDP flash estimate for the 3rd quarter revealed a year-on-year growth rate of 0.7%, the same value than in the 2nd quarter. At the domestic demand level, private consumption might have accelerated in the 3rd quarter, due to the recovery observed in both components, non-durable and durable consumption, more intense in the second. However, it should be noticed that this evolution might be partially connected to the postponement of purchases for the 3rd quarter led by the changes in the VAT and to the effect of the changes in the vehicle tax observed in the same period of 2007. On the contrary, accordingly to its indicator, the GFCF in the 3rd quarter might have accentuated its negative evolution, driven by the transport material and construction components. Concerning the international trade of goods, from the 2nd to the 3rd quarter, imports registered a slowdown (from 9.7% to 9.2%) and exports accelerated (from 3.7% to 5.1%), in nominal terms. The economic climate indicator, available up to October, and the economic activity indicator, available until September, extended the pronounced downward movements of the previous months.The unemployment rate was 7.7% in the 3rd quarter, 0.2 p.p. less than in the 3rd quarter of 2007. Employment recorded a year-on-year growth rate of -0.1% in the 3rd quarter, 1.5 p.p. less than in the 2nd quarter of 2008.In October, year-on-year inflation was 2.3%, 0.8 p.p. less than in the previous month. The differential between the EA Harmonized Index of Consumer Prices (HICP) and the Portuguese HICP increased by 0.3 p.p. in October to 0.7 p.p..