Portuguese unemployment falls for third quarter in a row

After emerging from a deep recession in the second quarter of last year, the Portuguese economy is showing further signs of improvement as unemployment fell for the third quarter in a row at the end of last year. According to official figures released by Statistics Portugal, the jobless rate declined to 15.3 percent in the fourth quarter of 2013 from 15.6 percent in the third. The rate was down 1.6 percentage points from the same period a year earlier. The number of people out of work in the period October-December declined 1.4 percent from the third quarter to 826,700 and was down 10.5 percent from a year earlier. The number of people unemployed in industries such as mining and manufacturing declined by 4.3 percent from the third quarter, while the number of jobless in the services sector increased by 4.0 percent.

The Portuguese economy grew on a quarterly basis for the second quarter in a row in the period July-September as GDP advanced 0.2 percent after a surprisingly strong gain of 1.1 percent in the previous three months. The Bank of Portugal in December raised its forecast for GDP growth this year to 0.8 percent from 0.3 percent previously, while Economy Minister António Pires de Lima last month said the economy could grow more than 1 percent this year.

With only months to go before Portugal’s 78-billion-euro bailout program is due to end, there has also been some good news on public finances, with the country bringing its budget deficit down to about 5.0 percent of GDP last year, compared with a target of 5.5 percent.

As part of the terms of the bailout program, the center-right coalition government of Prime Minister Pedro Passos Coelho needs to achieve additional budget savings this year of some 3.2 billion euros to further trim the deficit to 4.0 percent of GDP before bringing it back within the European Union ceiling of 3.0 percent in 2015.