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Price changes extend descendent path. GDP decelerates in the Euro Area and in Portugal in the 2nd quarter
Monthly Economic Survey
Price changes extend descendent path. GDP decelerates in the Euro Area and in Portugal in the 2nd quarter - July 2023
18 August 2023


In the Euro Area (EA), Gross Domestic Product (GDP) in volume recorded a year-on-year increase of 0.6% in the second quarter of 2023 (1.1% in the first quarter) and a quarter-on-quarter rate of change of 0.3% (null rate of change in the previous quarter). In Portugal, GDP in volume presented a year-on-year rate of change of 2.3% in the second quarter of 2023 (2.5% in the previous quarter). Comparing with the previous quarter, there was a nil rate of change (growth of 1.6% in the first quarter). 

The Portuguese industrial production price index presents a continuous descendent path since June 2022, registering in the last four months negative year-on-year rates of change (which had not happened since February 2021), attaining -6.7% in July, a new minimum of the series. The grouping of Energy was decisive for the reduction of the total index, with rates of -20.8%, -24.7% and -25.6% between May and July. Excluding the energy component, this index had a nil year-on-year variation in the last month (0.7% in June). The index for consumer goods recorded a year-on-year growth rate of 6.2% (6.5% in the previous month), decelerating for the eighth consecutive month, after reaching in November the highest growth of the current series (16.2%). 

The year-on-year rate of change in the Consumer Price Index (CPI) decelerated to 3.1% in July, 0.3 percentage points (p.p.) less than in the previous month. The index for unprocessed food decelerated, from 8.5% in June to 6.8% in July. On the external side, the implicit prices of exports and imports of goods, in June, registered year-on-year rates of change -4.8% and -9.1%, respectively (-2.3% and -6.5% in May).

The short-term indicators for economic activity from the perspective of production, available for June, point to decrease in Industry, a deceleration in Services and an acceleration in Construction. From the expenditure side, the economic activity indicator increased less intensely in June, while the Gross Fixed Capital Formation indicator decreased in year-on-year terms and the private consumption indicator accelerated. The economic climate indicator, which summarizes the balances of responses to questions relating to business surveys, decreased in July, after having stabilized in June.

According to the Labour Force Survey, in the second quarter of 2023, the unemployment rate stood at 6.1%, 0.1 percentage points less than the rate observed in the previous quarter (5.7% in the second quarter of 2022). Total employment increased by 1.1% compared to the previous quarter and 1.6% in year-on-year terms. In the same quarter, gross monthly earnings by employee increased 6.7% when compared to the second quarter of 2022. In real terms, considering the Consumer Price Index, the total gross earnings increased by 2.4%. 

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