ExpertEye European Automotive Report Q3 2016 | Page 22

Portugal – Weak investment holds back growth

.

Despite private consumption being the main driver of real GDP growth weak

Economic Forecasts

2015 2016 2017 2018

investment is one of the key factors holding back the Portuguese economy.

GDP growth (%. yoy)

1.6

0.9

1.2

1.4

There was also a significant drop in the growth of the consumption of goods

Inflation (%. yoy)

0.5

0.7

1.2

1.4

Unemployment (%)

12.6

11.1

10.0

9.5

Public budget balance (% of GDP)

(4.4)

(2.7)

(2.2)

(2.4)

Gross public debt (% of GDP)

129.0

130.3

129.5

127.8

Current account balance (% of GDP)

(0.3)

0.5

0.8

1.2

like motor vehicle components in quarter 2 which has resulted in a sharp
decline in economic growth which now stands at 0.6pps.
The Economic Sentiment Indicator improved strongly again this quarter and
whilst still high unemployment levels are continuing to fall private investment

RV Index: 36 months / 90,000 kms
120

Europe Average

forward there are expectations for growth to pick up in 2017 and 2018 with
co-funded investment from the EU. Whether it is to avoid further anti-EU

115

feeling Portugal, along with Spain, has neither been fined nor had funds

110

around 14.8%. This will put Portugal back over 200,000 units. The last time
Portugal went above 200k car sales was in 2010, the year before Portugal

2016 09

2016 05

2016 01

2015 09

2015 05

2015 01

2014 09

2014 05

2014 01

2013 09

2013 05

sales are still up 14.4% for the YTD and 2016 should end with growth of

2013 01

months that Portugal has not enjoyed double digit sales growth. Despite this

2012 09

90
2012 05

New car sales rose 8.9% in October 2016 which is only the third time in 14

2012 01

95

2010 01

Commission’s vice president Valdis Dombrovskis

2011 05

100

2011 01

2.7% this year the EU feels Portugal is “doing enough” according to the

Portugal

105

2010 09

the official line is that as Portugal is now on target to see the deficit drop to

2010 05

frozen for failing to keep their budget deficits below 3% last year. Although

2011 09

remains weak, in part due to the depressed levels of public spending. Going

Sources: European Commission – Economic Forecasts ExpertEye AG - RV Index
Bowkett Auto Consulting Ltd - Forecast vehicle sales

almost went bankrupt and had to be bailed out by the EU which then saw

European Automotive Report - 2016 Quarter 3

21