Portugal’s economic activity fell in August, according to the Bank of Portugal which noted that this was the second month in a row that the figures has defied government wishes.
The index fell 0.6% year on year, which shows a worsening situation which can be attributed to a slow down in private consumption which is still growing, but not fast enough to bring happiness to the Treasury.
The low rise of 1.2% in domestic consumption is the smallest increase since January, but it is an increase none-the-less.
The Bank of Portugal data shows demand slowing further as from July, with August notable for the BES rescue operation which the Bank of Portugal admits, in a notable understatement, will have an impact on the national economy.
As for how severe an impact remains to be seen as the Bank of Portugal certainly is not going to have a go at quantifying the loss to taxpayers from the botched BES rescue as was in charge of the bailout.
The Economy Minister Pires de Lima said this week that it is still early to see what impact the situation of BES in the economy but commentators are predicting massive losses to the taxpayer and investors when Novo Banco is sold on and the Espirito Santo network of insolvent companies finally is accounted for.
The data available shows a first half growth of only 0.9%, which is well below the government’s forecast and also below the reforecast in the amended budget.
Comments
Interesting hearing now that Espirio Santo Group (ESG) are concerned that Tranquilidade Insurance may be sold off too cheaply. That if Novo Banco gets their hands on it first, the ESG may not get any dosh to sort out their own problems ....
This being Portugal, we must assume that Apollo - ESG's 'preferred' buyer, is 'supported' by previously hidden Espirito Santo funds. Which ESG, as the new /old owner, then gets back !
As we all assume the cousin Mello group in buying up Espirito Santo Healthcare is also 'supported' by ESG.
So all along the intention was to offload / crash the unhealthy ESG bits and run a sophisticated 'buy back' scheme for the healthy bits ... ???
And is the Bank of Portugal in on this ?
Now tell your friends where you first read this - the pioneering Algarve Daily News !