Summary
In the Euro Area (EA), the economic sentiment and the consumer confidence indicators extended in November the downward movement observed since August 2007. The latest information on the main costumer countries industrial production index, for October, pointed to a strong reduction of this activity. In November, the oil price and the raw materials price index year-on-year growth rates continued to diminish strongly.
On the domestic side, most of the available information pointed to a strong slowdown of economic activity. The economic climate indicator, available up to November, attained the minimum value of the series started in 1989 and the economic activity indicator, although slightly increasing, remained in a relatively low level in October. The private consumption indicator decelerated in October, due to the negative evolution of both components, non-durable and durable consumption. In the same month, the GFCF indicator might have accentuated its negative evolution, driven by the construction and the machinery and equipment components. However, it should be noticed that the recent evolution of the private consumption indicator and of the transport material component of the GFCF indicator might be partially connected to adjustments made to previous changes in taxes. On the supply side, in October the Short Term Indicators information revealed declines in the services and industry sectors. Concerning the international trade, imports and exports recorded nominal year-on-year growth rates significantly lower in October than in the previous month, with imports going from 9.6% to 3.3% (associated with the reduction of oil prices) and exports from 4.7% to -1.6%.
In November, year-on-year inflation was 1.4%, 0.9 p.p. less than in the previous month. The differential between the EA Harmonized Index of Consumer Prices (HICP) and the Portuguese HICP stabilized in 0.7 p.p. in November.