Portuguese economy recorded a net lending of 0.4% of Gross Domestic Product (GDP) in the first quarter of 2023, which compares with a net borrowing of 0.6% in the previous quarter. Gross National Income (GNI) and Gross Disposable Income (GDI) increased by 2.7% and 2.6% (2.6% and 2.7% in the year ending in the fourth quarter). The increase of the economy's external balance mainly reflected the reduction in the deficit of Non Financial Corporations and the surplus recorded by General Government (GG) sector, which had recorded a negative balance in the previous quarter.
The disposable income of Households sector was up by 1.9% compared to the previous quarter, with increases of 2.7% and 0.8% in compensation of employees and Gross Added Value (GVA), respectively. Final consumption expenditure increased by 2.6% (3.1% in the previous quarter), leading to a reduction in the savings rate to 5.9% (6.5% in the previous quarter), which led to a net lending of 0.4% of GDP (0.6% of GDP in the previous quarter). In real terms, the adjusted disposable income per capita of Households decreased by 0.1% in the first quarter of 2023.
The balance of Non-Financial Corporations stood at -2.0% of GDP, after a balance of -2.7% of GDP in the previous quarter. GVA recorded an increase of 3.3%, higher than the growth in compensation of employees paid (growth rate of 3.2%), while Gross Capital Formation decreased by 0.3%. The net lending of Financial Corporations remained at 1.9% of GDP in the year ending in the first quarter of 2023.
The balance of the GG sector increased by 0.5 percentage points in the year ending in the first quarter of 2023, moving from a net borrowing of 0.4% of GDP in the fourth quarter to a net lending of 0.1%. Considering the quarterly values and not the year ending in the quarter, the GG balance in the first quarter of 2023 was positive and reached 761.3 million euros, corresponding to 1.2% of GDP, which compares with -0.6% in the same period of 2022. Compared to the same period of the previous year, there was an increase of 9.3% in revenue and 4.3% in expenditure, mainly reflecting, in the latter case, the significant increase in interest payments (rate of change of 22.1% compared to the same quarter of the previous year).