Published by Global Banking & Finance Review®
Posted on May 30, 2025
2 min readLast updated: January 23, 2026
Add as preferred source on GooglePortugal's economy shrank 0.5% in Q1 2023 as exports fell and imports rose, influenced by global trade tensions and tariff concerns.
LISBON (Reuters) -Portugal's economy shrank 0.5% in the first quarter from the previous three months, when it grew 1.4%, as exports fell and imports rose in anticipation of higher tariffs amid global trade tensions, official data showed on Friday, confirming the flash estimate.
In its second reading of gross domestic product, the National Institute of Statistics (INE) also confirmed its year-on-year growth figure of 1.6% released at the beginning of the month. In the fourth quarter, Portugal's economy grew 2.8%.
INE said the contribution of net external demand to the quarter-on-quarter GDP was minus 0.7 percentage points, while in the fourth quarter it had contributed positively with 0.7 pp, "reflecting a decline in exports and an increase in imports".
Exports of goods and services, including the key tourism sector, fell 0.4% from the previous three months.
Meanwhile, imports increased 1% anticipating the tariffs announced by U.S. President Donald Trump - most of which have been temporarily suspended - and a potential response from the European Union.
INE said the positive contribution of domestic demand also decreased to 0.1 pp, from 0.7 pp in the fourth quarter, "with a reduction in private consumption", which fell 1.1% in the first three months after growing 2.8%.
Total investment increased by 3.8% with the help of European Union funds, after it fell 5.0% in the previous quarter.
The Bank of Portugal has forecast the economy should grow 2.3% this year in an acceleration from last year's 1.9%, but it said a tariff war could reduce that projected growth by 0.9 percentage points.
(Reporting by Sergio Goncalves and Andrei Khalip; editing by Giles Elgood)
Portugal's economy shrank 0.5% in the first quarter from the previous three months.
Exports of goods and services, including the key tourism sector, fell 0.4% from the previous three months.
Imports increased by 1% in anticipation of tariffs, contributing to the economic contraction.
The Bank of Portugal has forecast the economy should grow 2.3% this year, although a tariff war could reduce that projected growth by 0.9 percentage points.
The positive contribution of domestic demand decreased to 0.1 percentage points, down from 0.7 percentage points in the fourth quarter.
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