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In a nutshell, external data in February, remained on the weak side, namely Services surplus, -2.2%YoY and Travel surplus (consolidates into Services): -0.1%YoY. Tourism is losing steam, fortunately the deficit at the Goods Balance is stable at 9.5% of GDP, so Current Account surplus at 1.05% of GDP (last 12 months), remains positive despite slightly below moving averages.   

The Bank of Portugal has just released February’s External Balance data.     

The main highlights are the following:

1 – Current Account Balance, in percentage of GDP, last 12 months: 1.05%. Compares with the 12MMA (12 months moving average): +1.2% and 3MMA: +1.1%;

2 – Balance of Goods (just goods, net), deficit: -9.5% of GDP (last 12M) vs. 12MMA: -9.6%/3MMA: -9.6%;

3 – Balance of Goods, deficit, in February, went slightly down -0.9%YoY vs. 12MMA: +14.1%/3MMA: +1.3%;

4 – Balance of Services (just services, net; includes Travel Account Balance) surplus: +10.6% of GDP (last 12M) vs. 12MMA: 10.9% and 3MMA: 10.7%;

5 – Balance of Services, Surplus, in February,  went down -2.2%YoY vs. 12MMA: 1.9%/3MMA: -6.0%;    

4 – Travel Account Balance (just tourism revenues, net; a subcomponent of Services Account Balance) surplus is at +7.1% of GDP (last 12M) vs. 12MMA: +7.2%/3MMA: +7.1%;

5 – Travel Account surplus, in February went down -0.1%YoY vs. 12MMA: +3.9%/3MMA: +0.2%.

Our comments: The external position of the Portuguese economy remains under pressure, Current Account Balance slightly negative in February, despite still positive vs. the GDP, last 12 months, 1.05%; however slightly below moving averages. The Balance of Services -2.2%YoY, negative growth four months in a row, while the Travel Account Balance (consolidates into the Balane of Services) recorded a negative growth, -0.1%YoY, it could be the Carnival seasonal impact, even so negative data. Fortunately, the deficit at the Balance of Goods is stable at 9.5% of GDP and in February slightly improved, -0.9%YoY.

All in all, the lower performance on the travel sector, could trigger a change on the Portuguese economic environment, lower consumption, and higher redundancies.    

Source: INE, BoP, AS Independent Research