FX.co ★ Portugal Economy Expands At Slower Pace; Inflation Eases Slightly

Preliminary data from Statistics Portugal revealed a slowdown in the country's economic expansion in the first quarter of the year. This report also indicated a slight dip in consumer price inflation during April, compared with an increase seen in the previous month.

In the March quarter, the year-on-year growth in Portugal's gross domestic product (GDP) was 1.4 percent, marking a decrease from the preceding quarter's 2.1 percent increase. However, GDP showed a steady quarter-on-quarter growth of 0.7 percent.

The agency reported that the domestic demand's positive effect on the annual GDP growth rate lessened in the first quarter due to a slowdown in both private consumption and investment. The March quarter saw a flat contribution from net external demand, as there was a slowdown in the volume of exported goods and services and a slight growth in imports.

The consumer price inflation rate lessened slightly from 2.3 percent in the previous month to 2.2 percent in April. Unprocessed food product prices remained the same in April, but the annual price growth for energy products increased significantly to 7.91 percent from 4.78 percent.

Excluding energy and unprocessed food products, core inflation also saw a drop from 2.5 percent in March to 2.0 percent in April. On a per-month basis, the growth in consumer prices was 0.5 percent in April, which is significantly slower than the 2.0 percent growth in the preceding month. Furthermore, inflation harmonised with the European Union's standards decreased to 2.3 percent from the 2.6 percent seen in March.