Portuguese economy grows in second quarter

The Portuguese economy grew 1.5 percent of Gross Domestic Product (GDP) in the second quarter of this year as investment and household spending rose, according to figures released on Monday by the Portuguese National Institute of Statistics.

The Lisbon-based statistics body revealed that internal demand rose from 1.8 percentage points in the first three months of the year to 3.4 points in the second quarter.

Household spending rose 3.3 percent year on year, from 2.5 percent in the previous quarter and public consumption grew 0.5 percent, returning to positive territory.

According to the report, investment is also contributing to economic growth, reaching almost 6.9 billion euros between April and June, 7 percent higher than the same period last year.

Portugal's economy returned back to growth last year after several years of harsh austerity implemented by the center-right ruling coalition after it was forced to sign a 78 billion euro bailout program in 2011 when it was on the verge of bankruptcy.

Prime Minister Pedro Passos Coelho, who faces elections on October 4, said exports and investments are driving the economy which he expects will grow 1.6 percent this year.

The main opposition party, the Socialist Party, has firmly criticized austerity and denied that it has helped drive growth. On Monday local media reported that the party reacted by pointing out that the figures reflected an economy based on credit and indebtedness.