UPDATE 1-Portugal economy rebounds from second quarter, pandemic weighs on year

(Adds details, context)

LISBON, Oct 30 (Reuters) - Portugal’s economy expanded 13.2% in the third quarter, rebounding from a record slump of 13.9% in April-June marked by a nationwide lockdown, though it still contracted sharply from a year ago due to the coronavirus pandemic, data showed on Friday.

The National Statistics Institute (INE) said in its advance flash estimate gross domestic product (GDP) shrank 5.8% in the quarter from a year earlier, after the pandemic brought the country’s key tourism sector to its knees.

In the second quarter, the year-on-year drop had been 16.3%.

The government led by Prime Minister Antonio Costa will discuss potential new restrictions in an emergency meeting on Saturday due to a resurgence of contagion. It has said it expects the economy to contract 8.5% for the whole of this year, which would be the country’s worst slump in almost a century.

The INE said domestic demand had a “highly positive contribution” to the quarter-on-quarter growth, and external demand also contributed positively as exports grew.

Compared with a year ago, external demand still weighed on activity, mainly due to lower exports of services that include tourism.

In neighbouring Spain, Portugal’s key trading partner, GDP expanded 16.7% in the third quarter from the second, but the economy was still 8.7% smaller than a year ago. (Reporting by Andrei Khalip Editing by David Holmes)