Portugal’s gross domestic product (GDP) has contracted 1.2 percent in the second quarter of this year as domestic demand fell under the burden of austerity measures imposed through a bailout. The data released by the National Statistics Institute on Friday said that the Portuguese economy has shrunk 3.3 percent in the quarter compared with last year’s corresponding period, Reuters reported. In the first quarter, Portugal's economy shrank 2.3 percent from a year earlier. Meanwhile, internal demand dipped 7.6 percent from a year earlier, compared with a slide of 6.1 percent in the first quarter. Investment also plummeted 18.7 percent in the second quarter versus a decline of 12.8 percent in the first quarter. Exports rose 4.3 percent in the second quarter, although the figure was lower than the 7.9 percent gain in the first quarter.
Portugal expects its economy to contract 3 percent this year as it copes with the deepest recession it has gone through since the 1970s.The center-right government has introduced extensive austerity measures, including slashing civil servant wages and increasing taxes, in an attempt to keep the lid on Portugal’s dwindling economy. The measures have however upset the domestic consumption. MP/JR