Lockdown stunts economy in Portugal

in News · 15-05-2020 01:00:00 · 3 Comments
Lockdown stunts economy in Portugal

The precise impact of the lockdown on the economy of Portugal is starting to become clear with new data from the Bank of Portugal showing massive decreases in spending across almost all sectors.

Purchases paid by bank card fell by an average of €56 million per day, between March 19 and April 20, according to Banco de Portugal, giving an indication of the effect of the pandemic on the economy as a whole.
Referring to the impact of Covid-19 on payment systems, Banco de Portugal (BdP) stated that, between March 19 and April 20, 2020, the amount of card purchases decreased by 46 percent compared to the value that would be expected in a normal situation, without a pandemic, at an average of €56 million less per day.
The data released by Banco de Portugal indicates that, in the days prior to the closure of schools, between 11 and 13 March, there was an increase in purchases, which they believe corresponds with people stocking up before the quarantine period.
In the following period analysed, between March 15 and April 20, the data shows a significant drop in purchases, with Easter Sunday (12 April) being the day of the year in which there was a greater drop in card purchases compared to the forecast, of around 75 percent.
There was also a significant drop in card withdrawals.
Between March 19 and April 20, 2020, the amount of withdrawals with a card fell by 46 percent compared to what was expected, at an average of less than €34 million per day.

As for purchases and withdrawals by foreigners, Banco de Portugal estimated a significant drop in these indicators in March (April data has not yet been released), compared to the same month of 2019.
According to BdP, in March, it was estimated that €182 million less was spent on purchases and €34 million less in cash withdrawals by foreign citizens.
Most sectors suffered in March with the consequences of the situation created by the Covid-19 epidemic, with a significant drop in purchases.
The sector that suffered the most in absolute terms was the restaurant sector, with a reduction in purchases of €229 million compared to the same period in 2019, according to Banco de Portugal. The percentage of decline was 55 percent.
The accommodation sector fell by 56 percent, but Banco de Portugal does not indicate the absolute value, knowing only that it is less than that of the restaurant sector.
As for other sectors, the fall in purchases was 39 percent in public administration, 38 percent in health, 33 percent in education, 28 percent in petroleum products, 23 percent in postal activities, 21 percent in motor vehicles and motorcycles and 7 percent in wholesale.
Contrasting the trend was the retail trade sector (which includes supermarkets), the only one to record a positive year-on-year change, albeit slight, of around 0.1 percent.
It should be noted, however, that in March the impact of the Covid-19 was not yet fully felt, with the normality of economic activity being maintained until almost the middle of the month.
Still in March, card purchases using ‘contactless’ technology grew 115 percent, still below February, when they increased 143 percent, compared to the same period in 2019.
Online shopping with cards, on the other hand, grew 18 percent in March, but “at a slower pace than in previous months”, according to Banco de Portugal, while card purchases abroad fell for the first time, when they decreased 16 percent in March.



Comments:

This decline in consumer spending is global and has nothing to do with foreign ownership of companies. Portugal is an amazing tourist destination even though Lisbon has become overrun with Air B&B. Although reliant on tourists Portugal produces excellent quality meat, vegetables and fruit in which it is self sufficient and don’t forget the freshest fish you will ever eat accompanied by local, inexpensive wines to grace any table in the land.

by Alex from Lisbon on 16-05-2020 10:53:00

This is what happens when one countr and its economy are so dependent from one sector only, the tourism and its subsidiary services restauration and construction. The internal demand is weak as it reflects almost non-existent local production of goods and, after being sold, an absence of industrial heavy infrastructure and services in the hands of foreigners! Even the ownership of thw active sectors is basically in the hands of oportunistic foreign interests which main priority now is, of course, not to invest in Portugal! Opportunity to change course? Maybe but I don't see the political will, capacity and competence do that!

by Tony Fernandes from Other on 15-05-2020 04:49:00

You ain't seen anything yet, this is only the beginning. 1.100 corona deaths and in a normal flu year, every year, 2.500. There was never a lock-down for the latter. Insane! But of course, we can always become a civil servant and have our salary paid by.........oh wait, the group of tax payers will be significant less then before. What about a basic income with a social credit system like China, I assume the pro lock-downers will love it. I´am sorry but this is not going to end well for the majority.

by Pedro from Lisbon on 15-05-2020 03:47:00
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