Summary
International economic background for the Portuguese economy in the 3rd quarter was characterized by facts with contradictory implications to the Portuguese economy. On one hand, the euro continued to appreciate more intensely and the oil and other raw materials prices boosted up. On the other hand, the economic activity in the euro area and in the total European Union still presented an acceleration. Internally, accordingly to the flash estimate, GDP might have decelerated slightly recording year-on-year change rates of 1.9% and 1.8% in the 2nd and 3rd quarters, respectively, mainly reflecting the behaviour of external demand. In the 3rd quarter, preliminary data revealed a decrease of 4.0 percentage points (p.p.) in the year-on-year growth rate of exports, in nominal terms, comparing with the 2nd quarter; simultaneously, imports accelerated slightly by 0.1 p.p.. Therefore, imports presented a higher growth rate in value than exports (5.3% and 4.8%, respectively), by the fist time since the 3rd quarter of 2005. Domestic demand accelerated in the 3rd quarter, as in the previous quarter, mainly as a result of the evolution of investment. This evolution reflected positive developments in all the investment components, especially in the transport material component. Private consumption might have presented a less dynamic behaviour as a consequence of the deceleration in durable goods consumption. In the 3rd quarter, employment recorded a year-on-year change rate of 0.2%, after diminishing in the previous quarter. The unemployment rate was 7.9%, the same value of the previous quarter, but 0.5 p.p. higher than in the same quarter of 2006. In October, inflation accelerated, reaching 2.6%, more 0.5 p.p. than in September.