Portugal – March External data – Surplus at Travel Balance surprised, +7.2%YoY, however, seems mainly due to earlier Easter impact

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In a nutshell, external data in March, kept the smooth downwards trend, Current Account surplus at 0.9% of GDP (LTM), slightly below moving averages. Travel outperformed in March, surplus +7.2%YoY and stable at 7.1% of GDP (LTM), even so, it seems mainly explained by earlier Easter in April. Balance of Goods deficit remains close to 10% of GDP (LTM), fortunately stable, while surplus at Services, 10.6% of GDP (LTM), below moving averages, has been in a smooth negative trend.  

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

The main highlights are the following:

1 – Current Account Balance, in percentage of GDP, last 12 months (LTM): 0.96%. Compares with 12MMA (12 months moving average): +1.2% and 3MMA: +1.0%;

2 – Balance of Goods (just goods, net), deficit: -9.7% of GDP (LTM) vs. 12MMA: -9.6%/3MMA: -9.7%;

3 – Balance of Goods, deficit, in March, went up +2.3%YoY vs. 12MMA: +12.3%/3MMA: +12.8%;

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

5 – Balance of Services, Surplus, in March, went down -3.0%YoY vs. 12MMA: 2.1%/3MMA: -2.8%;    

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

5 – Travel Account surplus, in March went up 7.2%YoY vs. 12MMA: +4.5%/3MMA: +3.1%.

Our comments: The external position of the Portuguese economy remains in a smooth downwards trend, Current Account Balance (LTM) at 0.9% of GDP, slightly below moving averages. Balance of Services, surplus at 10.6% of GDP (LTM) slightly below moving averages, while Travel, surprised, surplus in March +7.2%YoY, however, seems mainly due to earlier Easter (beginning of April vs. last year, mid-April). Fortunately, the deficit at the Balance of Goods is, apparently, stabilizing at high levels, close to 9.7% of GDP (LTM) and so the Current Account remains slightly positive in percentage of GDP (0.9%).       

Source: INE, BoP, AS Independent Research