LISBON: Portugal’s economy eked out uninspiring growth of just 0.2 per cent in the final three months of 2015, a final reading confirmed on Monday. Although this was a pick up from the third quarter, when the economy stagnated, economists had originally been expecting much better growth of 0.4 per cent for the final three months. Year on year, the economy grew 1.3 per cent in the fourth quarter.
All eyes recently have been on Portuguese bonds after an alliance of left-wing parties, led by António Costa’s Socialists, overthrew a centre-right government in November. Portuguese bonds were hit by a heavy sell-off at the start of the month amid fears that the new Socialist government would row back on austerity measures but have since been recovering, after a new budget was approved.
Ratings agency Moody’s provided a further confidence boost when it said last week that approval of the new budget, after much negotiation between the European Commission and Lisbon, was positive for Portugal’s credit rating.