(Recasts, adds consumption, exports, investment)
LISBON, Feb 28 (Reuters) - Portugal's economy grew 6.7%
in 2022, its strongest pace in 35 years, fuelled by domestic
demand and booming tourism, but inflation put the brakes on
private consumption in the fourth quarter, presaging a sharp
slowdown this year.
In its second reading of gross domestic product released on
Tuesday, the National Statistics Institute (INE) revised
fourth-quarter growth slightly higher yet kept the annual figure
unchanged.
It said the economy grew 0.3% in the last quarter of 2022,
up from 0.2% estimated a month ago and the same as in the third
quarter. Year-on-year growth reached 3.2%, up from its flash
estimate of 3.1%.
However, INE said the contribution of domestic demand to
year-on-year GDP was only 1.9 percentage points (pp) after 3.2
pp in the previous quarter, while external demand contributed
with 1.1 pp compared to 1.6 pp in the third quarter.
Hit by high inflation, private consumption - which
represents two-thirds of GDP - grew just 2.7% between October
and December compared to 4.3% in the previous three months.
Quarter-on-quarter, household consumption expenditures
decreased by 0.5% despite high inflation, while they had grown
by 1.1% in the previous quarter.
Portuguese consumer prices rose 8.2% year-on-year in
February in a slowdown from 8.4% reported in the previous month,
flash data from INE showed on Tuesday.
Still, core inflation, which strips out volatile food and
energy prices, accelerated to 7.2% from 7.0% in January.
The INE said investment fell 1.2% year-on-year in the fourth
quarter after a 1.6% increase in the July-September period,
while exports growth halved to 8.1% year-on-year from the
previous three months' 16.3% despite the key tourism sector's
recovery to near pre-pandemic levels.
The government projects expansion to slow to just 1.3% in
2023, with private consumption almost stagnating as families
struggle with high energy and food prices alongside rising
interest rates and slowing exports.
(Reporting by Sergio Goncalves and Matteo Allievi, editing by
Ed Osmond)
Messaging: sergio.goncalves.reuters.com@reuters.net))
