Portugal's business confidence sinks in May, glimmers of recovery

LISBON (Reuters) - Portugal's headline business and consumer confidence indicators based on a three-month moving average fell sharply in May, but monthly data pointed to a recovery as the country lifted its coronavirus lockdown.

The National Statistics Institute (INE) said on Thursday the main economic climate indicator fell to -3.2 this month from -0.7 in April, while its consumer confidence indicator dropped to -29.1 from -21.0.

Discounting three-monthly figures and looking at the straight month-on-month comparison, consumer confidence rose in May to -32.1 from -41.6.

Business confidence also edged higher, led by the construction and commerce sectors as the country began gradually reopening the economy on May 4 after a six-week lockdown.

"In this period of increased volatility it makes sense to also take into account monthly figures," said Filipe Garcia, head of Informacao de Mercados Financeiros consultants, explaining that the headline number is designed to smooth out any unusual economic shocks.

Portugal begins the third phase of its lockdown exit plan on Monday, opening cultural spaces such as cinemas and theatres, as well as shopping malls.

The country's export-oriented, tourism-dependent economy reversed its growth path to shrink 3.9% in the first quarter from the preceding three months, INE data showed earlier in May.

(Reporting by Victoria Waldersee; editing by Andrei Khalip and Barbara Lewis)