Some Positive Economic News From Portugal

Portugal, one of those problem countries in the Euro Area along with Ireland, Spain and Greece is beginning to show some slight signs of an improving economy . The first chart shows the year to year increases in Retail Trade and in Industrial Production. According to data announced today, the year to year increase in industrial production was 2.4% in February, compared with 2.6% in January. These were the first positive year to year changes since September 2008. Retail trade experienced its first positive year to year change since October, 2008, in December of last year. Although negative, the year to year changes since then have been small, -0.73% in January and -0.43% in February.

Another indication that the economy is beginning to recover is the rise, though modest, in prices. The year to year increase in the Harmonized Consumer Price Index turned positive for the first time since February 09 in January of this year and has continued to rise in February, as can be seen in the second chart.

While these signs are encouraging, much remains to be done to redress Portugal's growing government deficit and debt, which are illustrated in the third chart.