Official figures show that the Portuguese economy shrank 0.3% in the fourth quarter of 2010 but still managed to post growth of 1.4% for the full year.
The country's national statistics office said the drop in the fourth quarter was the first since the same period in 2009.
Compared with the fourth quarter of 2009, however, the economy showed growth of 1.2% after a gain of 1.3% in the three months to September, the office said in a preliminary report. The government had previously estimated that the economy would grow 1.3% for all of 2010.
For 2011, it is forecasting growth of 0.2%, but the central bank sees a contraction of 1.3% because of the austerity measures the country has had to implement in an effort to balance the public finances.
