The National Statistics Institute said exports in September dropped 6.5 percent from a year earlier, the first negative reading since October 2009, although they still rose 6.5 percent from August levels.

The INE, which focuses on three-month trade figures, said exports in the third quarter rose 4.5 percent, bringing Portugal's global trade deficit 29 percent lower.

In the quarter, exports to European Union countries that represent Portugal's main market dipped by almost 1 percent to around 7.6 billion euros due to an economic slowdown there, but sales of goods outside of the EU still rose by a steep 19 percent to 3.37 billion euros, the institute said.

But trade with countries overseas like Angola, Brazil and China suffered a setback in September when stevedores in key ports of Lisbon, Setubal and Figueira da Foz started a series of strikes, that still continue, over changes to port rules that unions say compromise stevedores' jobs and labour rights.

The INE said outbound trade via ports slumped 18 percent in September from August. Stevedores went on strike on Sept. 17 and have since extended their labor action several times until Nov. 27, preserving minimum services in the ports. The Ports of Leixoes near Porto and Sines south of Lisbon are operating normally.

On Nov. 14, Portuguese main umbrella union CGTP plans a general strike against the government's austerity policies that include the heaviest tax increase in the country's modern history in next year's budget.

The debt-laden country's exports sector had been doing relatively well even as the government imposed tough austerity under a 78-billion euro EU/IMF bailout that weighs on internal consumption.

Exports growth has helped alleviate some of the pressure on the economy, which is still expected to contract 3 percent this year as the country struggles through its worst recession since the 1970s, but it is expected to slow down next year due to Europe's economic problems. The recession is expected to extend into next year when the economy should shrink a further 1 percent.

The European Commission said earlier this week Portugal's rebalancing towards net exports was occurring faster than expected, with foreign sales predicted to rise 4.5 percent this year, "well above what might have been expected from the strength of external demand".

Next year, export growth should slow to 2.7 percent, but the commission said a strong fall in labour costs this year was expected to boost Portugal's external price competitiveness. (Reuters)