The goods and services account has been in surplus in recent years, which constitutes an historical benchmark for the Portuguese economy. The evolution of the nominal balance is affected by the change in quantities exported and imported and the change in relative prices. These contributions are referred to as “volume effect” and “terms of trade effect”, respectively, to which the residual “price and mixed effect” is added.

The increase in the goods and services account balance in Portugal in the period 2011-2013 resulted essentially from a real increase in exports above that of imports. These developments implied a positive and very significant volume effect to the change in the balance of goods and services. In the most recent period the volume effect was negative but partially compensated by a positive terms of trade effect, mostly associated to the decrease recorded in oil prices.

For more details see Special Issue “A look into external account developments in Portugal”, published in the Economic Bulletin of Banco de Portugal of March 2020.

Prepared by João Amador, Ana Correia and Cristina Manteu. The analyses, opinions, and findings expressed above are those of the authors and do not necessarily coincide with those of Banco de Portugal or the Eurosystem.

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