Summary
In the Euro Area (EA), the economic sentiment and the consumer confidence indicators strengthened in December the downward movement observed since August 2007. In the same month, the oil price (Brent) and the raw materials price index year-on-year growth rates registered stronger reductions. The available information on the main costumer countries' industrial production index recorded a more intense decline in November.
On the domestic side, the economic climate indicator, available up to December, and the economic activity indicator, available until November, decreased significantly, attaining the minimum value of the series in the first case and the lowest value since October 2003 in the second. The negative evolution of economic activity is being expressed by most of the quantitative and qualitative information, particularly intense in the last case. The private consumption indicator slightly decelerated in November, due to the negative evolution of the durable consumption component, while the non-durable consumption component stabilized. In the same month, the GFCF indicator accentuated its negative evolution, driven by the decline registered in all components, but mainly in transport material. On the supply side, the Short Term Indicators information, available for November, revealed declines in the services and industry sectors and a less intense reduction of activity in the construction sector. Concerning the international trade of goods, imports and exports recorded again nominal year-on-year growth rates significantly lower in November than in the previous month, with imports varying from 4.0% to -1.7% (partially reflecting the reduction of oil prices) and exports from -1.1% to -5.9% (minimum since the beginning of 2002). The current international economic situation, with declines in economic activity of our main customer countries, might be strongly affecting the behaviour of Portuguese exports.
In December, year-on-year inflation was 0.8%, 0.6 p.p. less than in the previous month, attaining the lowest value of the series started in 1992. The differential between the EA Harmonized Index of Consumer Prices (HICP) and the Portuguese HICP increased 0.1 p.p. in December, to 0.8 p.p..