Portuguese exports increased 6% and imports by 3.8% in the three months to the end of July 2015 compared with the same period last year, the Portuguese National Statistics Institute (INE) revealed.
According to Lusa News Agency, the institute also said that in July exports were up 5.6% and imports down 1.1% compared with the same month in 2014. The trade balance at the end of July was €175.4 million down on 12 months earlier at just under €2.6 billion.
Portuguese families are in a borrowing mood—again. With the European Central Bank’s quantitative easing program pushing down borrowing costs, the Portuguese are buying cars and renovating homes by taking new bank loans—excluding credit cards and overdrafts—at levels higher than in May 2011, when the country’s international bail-out started.
Although new consumer loans are lower than in 2010, the gusto with which the Portuguese are borrowing and spending money is sparking concerns about the path the country’s economic recovery is taking a year after it exited the bail-out. It is a question politicians may need to address as the country heads into general elections next month.
“If this keeps up, it’s almost inevitable that we will end up over-indebted again,” says Filipe Garcia, an economist at Oporto-based financial consulting company IMF-Informacao de Mercados Financeiros.
“With the ECB keeping interest rates very low and banks shoring up their own problems, they are more willing to lend again. Supply is playing an essential part,” he says.
Portugal’s consumers are being lured by cheap credit, showing ECB president Mario Draghi’s quantitative easing efforts are beginning to work.
The ECB’s €1.1-trillion ($1.24 trillion) bond-buying plan has sent the yield on the Portuguese 10-year bond down to about 2.5%, a fraction of the more than 18% in 2012.
