Covid-19: Fall in GDP shows that economic recovery is a “mirage” – AEP

Editorial Staff, July 31, 2020 (Lusa) – The 16.5% drop in Gross Domestic Product (GDP) in the second quarter, in year-on-year terms, shows that the economic recovery “is a mirage”, defended the Portuguese Business Association (AEP), in a statement.

The entity stressed that “today had the official confirmation of what companies and, consequently, the Portuguese economy have already been feeling: an abrupt fall in activity, of which there is no memory”.

“It means that, as we predicted, we are in a technical recession, as are our main trading partners, who also saw reductions in their GDP in the order of double digits,” said AEP.

The association also recalled that “the two main destination markets for Portuguese exports registered the most severe evolution, with Spanish GDP falling 18.5% in a chain and 22.1% year on year and French GDP registering a drop in 13.8% in the chain and 19% year-on-year ”, to which is added“ the sharp fall in Germany (-10.1% and -11.7%) and in Italy (-12.4% and -17, 3%) ”.

For this reason, for the president of AEP, Luís Miguel Ribeiro, quoted in the same communiqué, “these data give rise to great concern and demonstrate well that, unfortunately, the much desired phase of recovery is still a mirage at the moment and therefore constitutes more proof of the need for increased attention and, fundamentally, for a quick action by public policies ”.

CEPOL underlined “the enormous importance of measures to support the economy, namely the extension of the simplified lay-off, in the model that has worked until now, at least until the end of the year” and also called for “other measures to support the enormous lack of liquidity for Portuguese companies ”.

For AEP, it is essential to “put on the ground credit lines with State guarantees already strengthened, export credit insurance, various fiscal measures, as well as the reallocation of funds from Portugal 2020 to the business fabric”.

The association also called for the “implementation of a flexible labor policy, which is adapted to the dynamics of economic activity”.

“In this context, Portugal's priority will have to focus, increasingly, on strengthening support for business activity”, stressed the organization.

Portuguese GDP fell by 16.5% in the second quarter of the year compared to the same period in 2019, due to the economic effects of the covid-19 pandemic, the National Statistics Institute (INE) announced today.

“Reflecting the economic impact of the pandemic, GDP contracted sharply in real terms in the 2nd quarter of 2020, having decreased 16.5% year-on-year, after the 2.3% reduction in the previous quarter”, you can read based on a quick estimate released by INE.

In the quarter in which the biggest drop in Portuguese GDP was ever recorded in year-on-year terms, the drop in chain – relative to the first quarter of the year – was 14.1%, also said INE.

According to the statistical institute, the result registered in relation to the same period of 2019, a decrease of 16.5%, “is explained to a large extent by the negative contribution of domestic demand to the annual variation of GDP, which was considerably more negative than in the previous quarter, reflecting the significant contraction in private consumption and investment ”.

ALYN (JE) // EA

Covid-19: Fall in GDP shows that economic recovery is a “mirage” – AEP appears first in Vision.

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