Portugal's economy shrank 0.2% in the third quarter from the previous three-month period, when it grew a revised 0.1%, due to the fall in net exports, including tourism, official data showed on Tuesday.

The National Statistics Institute (INE) said the contribution of net exports to the quarter-on-quarter gross domestic product turned negative after being positive in the second quarter, "reflecting the reduction of exports of both components, goods and services, including tourism".

It added that the contribution of domestic demand moved from negative to positive in the third quarter, with increases in private consumption and investment.

The INE also said in its flash estimate that the country's GDP grew 1.9% from a year earlier after registering an annual growth of 2.6% in the period between April and June.

The government expects GDP to grow 2.2% this year, compared with 6.8% in 2022 - which was its strongest pace in 35 years - as inflation and interest rate hikes are slowing private consumption and exports are growing less given the slowdown or even recession in some of Portugal's main European trading partners. (Reporting by Sergio Goncalves and Gdansk Newsroom; Editing by David Latona)