Portugal's economy grew 0.2 percent in the third quarter, less than expected but in line with the wider euro zone, as export growth slowed. The first reading on Friday of gross domestic product in July-September represented a small decline from the previous three months' 0.3 percent expansion. Economists surveyed by Reuters had predicted quarter-on-quarter growth of 0.4 percent.
Compared with a year earlier, GDP expanded 1 percent after 0.9 percent growth in the second quarter, data from the National Statistics Institute showed. It said private consumption had expanded while export growth decelerated. Portugal's main export destination is the euro zone, where economies are struggling. The government has forecast the economy will grow by 1 percent this year, the first full year of expansion following a three-year-long recession exacerbated by austerity measures imposed under Portugal's international bailout. The country exited the plan, which rescued it from a debt crisis, in May.
Economists said the slowdown could mean growth falls slightly short of the government's expectations this year, but still saw the economy picking up steam in 2015. "Our forecast remains 1 percent growth this year. We don't rule out a downward revision, but it would be very small," said Banco BPI economist Teresa Gil Pinheiro. "The forecast for next year is stronger, at 1.5 percent, because we expect imports to decelerate."
Filipe Garcia, head of Informacao de Mercados Financeiros consultants in Porto, said a crisis around Banco Espirito Santo had probably had an impact on the economy by hitting corporate lending, but it was brief and not very significant. The government rescued Portugal's second-largest lender in August. Garcia said growth could still reach 1 percent this year.
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