Gross Domestic Product (GDP) in real terms registered a year-on-year reduction of 5.9% in the fourth quarter of 2020 (rate of change of -5.7% in the previous quarter). The contribution of domestic demand to the year-on-year rate of change of GDP was less negative than that observed in the previous quarter, reflecting, to a large extent, the less intense reduction of Investment, despite the more pronounced reduction of private consumption. The net external demand presented a more negative contribution in the fourth quarter, with a more intense contraction of Exports of Goods and Services than that observed of Imports of Goods and Services.
Compared to the third quarter of 2020, GDP increased by 0.4% in real terms, after the strong rates of change of opposite sign in the previous quarters (-13.9% and +13.3% in the second and third quarters, respectively). The contributions of domestic demand and net external demand to the quarter-on-quarter rate of change of GDP were both positive.
In 2020, GDP recorded a contraction of 7.6% in volume (growth rate of 2.2% in 2019), the most intense of the available National Accounts series, reflecting the adverse effects of the COVID-19 pandemic on economic activity. Domestic demand presented a significant negative contribution to the annual rate of change of GDP, after being positive in 2019, mainly due to the decrease of private consumption. The contribution of net external demand was more negative in 2020, with exports and imports of goods and services diminishing significantly, particularly in the case of tourism exports which had an unprecedented reduction.