Summary
In the third quarter of 2006 the year-on-year rate of change in the Portuguese Gross Domestic Product (GDP) was 1.5%, in real terms, accelerating from the previous period (0.8%). Compared to the second quarter, the change was -0.2%. Exports of goods and services continued to grow at a robust pace, in volume (8.8%), accelerating from the previous quarter. Imports of goods and services also accelerated, year-on-year, increasing by 4.7% in volume. Therefore, the contribution of net external demand to GDP growth declined to 0.9 percentage point. In turn, domestic demand grew by 0.5% in real terms vis-à-vis the same period of the previous year (-0.8% change in the second quarter), which resulted mainly in the acceleration of consumption expenditure of resident households. This behaviour was influenced by the base effects associated with early purchases in the second quarter of 2005 in anticipation of the forthcoming increase in the VAT standard rate.