Daily Archives: August 16, 2011

Portuguese prime minister Pedro Passos Coelho arriving at last month's EU summit

Financial markets today have been whipsawed yet again by data showing the one bright spot on the eurozone’s economic horizon – the German growth engine – may be faltering. But Eurostat’s quarterly report on the currency region’s economic health did have at least one unexpected positive surprise, too: Portugal.

Yes, Lisbon may be beginning a wrenching austerity programme, agreed as part of its €78bn bail-out. And yes, the country’s bonds suffered recent downgrades because debt analysts do not think Lisbon will be able hit the bail-out’s debt and deficit targets.

But during the second quarter of the year, the Portuguese economy was flat – a significant improvement after two quarters of 0.6 per cent shrinkage, and much better than the 1.1 per cent decrease that analysts predicted.