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GDP Growth Slows in Eurozone and Portugal, Reports INE
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The National Institute of Statistics (INE) has reported a slowdown in Gross Domestic Product (GDP) growth for the second quarter, with both the Eurozone and Portugal experiencing a deceleration compared to previous periods.
The negative contribution of liquid external demand to the homologous variation of GDP was less pronounced, reflecting a more significant slowdown in imports of goods and services than observed in exports. This clarification comes from INE.
conversely, the positive contribution of internal demand to the homologous variation of GDP decreased in the second quarter, primarily due to a slowdown in investment. According to the National Institute of Statistics, while imports slowed, this was not as significantly reflected in exports, despite the considerable uncertainty generated by Donald Trump’s tariffs at the start of the year.
The government remains committed to its goal of achieving 2% growth by the end of the year.
Eurozone and EU Economic Performance
Eurostat data indicates that the Eurozone economy grew by 1.4% in the second quarter, while the European Union saw a 1.5% growth compared to the same period. Portugal’s GDP recorded the second-largest chain rise at 0.6%, as disclosed by Eurostat.
In the first three months of the year, the GDP of Eurozone countries experienced a homologous advance of 1.5%,and the 27 member states recorded 1.6%. Between April and June, GDP increased by 0.1% in the Euro area and 0.2% in the EU, according to a preliminary provisional estimate published by the European statistics service, which may still be subject to revision.
GDP growth softened in the second quarter compared to the 0.6% in the Euro area and 0.5% in the EU registered in the previous period. Eurostat states that the homologous growth rate was positive in all countries,with Ireland (16.2%),Lithuania (3.0%), and Spain (2.8%) showing the highest increases.
In a chain comparison,Spain (0.7%) registered the largest increase, followed by Portugal (0.6%) and Estonia (0.5%). decreases were observed in Ireland (-1.0%), Germany, and Italy (both -0.1%).
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Evergreen Insights: Understanding GDP Trends
gross domestic Product (GDP) is a essential economic indicator that measures the total monetary value of all the finished goods and services produced within a country’s borders in a specific time period. it serves as a broad gauge of the overall domestic production and economic health of a nation.
External demand refers to the demand for a country’s exports from foreign consumers and businesses. A slowdown in external demand can negatively impact GDP growth as export revenues decrease.
Internal demand, on the other hand, encompasses domestic consumption, investment, and government spending. A slowdown in internal demand, particularly investment, can also lead to reduced GDP growth.
The impact of global trade policies, such as tariffs, can create significant uncertainty, influencing both export and import activities and, consequently, GDP. Past trends show that periods of increased trade protectionism often correlate with slower global economic growth.
Frequently Asked Questions about GDP Growth
- What is GDP growth and why is it critically important?
- GDP growth measures the percentage change in a country’s gross Domestic Product over a specific period. It’s crucial as it indicates the overall health and expansion of an economy.
- How does external demand affect GDP growth?
- Strong external demand,
