“Even with this growth, we will still be 3.4% to 4.3% lower than the GDP of the same period in 2019 in the second quarter”, revealing the trend indicator of ISEG’s global activity.
According to the summary of the situation in May, it is expected that the Portuguese economy in the second quarter will grow by 14.5% to 15.5% compared to the same period last year, and it will grow by 4.2% to 5.1% ISEG compared to the previous quarter.
“Even with this growth, in the second quarter, we will still be 3.4% to 4.3% lower than the GDP of the same period in 2019”, maintaining the current trend of available information and taking into account the year-on-year basis, pointing out ISEG.
According to the ISEG global activity trend indicator constructed based on the previously analyzed sectoral indicators, it rose sharply in March and April. “With the cessation and reopening of activities, the most important reason is the base effect of year-on-year comparison. Since the second quarter, the anti-coronavirus health measures have led to a decline in economic activity and have been hit hardest.”
He said that the available data in May indicate that these trends will continue in May, and naturally, they are expected to continue in June.
In fact, he explained that the year-on-year change in energy consumption (temperature-adjusted) in May was about 12%, and as of May 30, the amount of payments and withdrawals in the SIBS network had increased by more than 30% compared to the same-origin period.
Therefore, due to the improvement in health and the base effect, the strong year-on-year GDP growth in the second quarter of 2021 is not a problem, but the speed at which the recovery will continue. He said that the evolution of the different components of demand was also very significantly affected by the base effect in the second quarter.
In terms of domestic demand, private consumption is expected to rebound sharply in the second quarter, subject to restrictions on purchases and production and base effects.
“This will be the most dynamic factor in demand at this stage, but public consumption and investment are expected to increase significantly year-on-year. In terms of net external demand, its contribution to quarterly GDP seems more uncertain, but it may be positive. “ISEG added.
Therefore, he stated that the global deficit in the second quarter may be lower than the same period in 2020, and the contribution of net external demand is positive.