LISBON- Portugal's economic growth slowed down to 2.9% in the third quarter from 4.4% in the preceding three months, official data showed on Tuesday, with a further deceleration likely in what remains of the year due to a new surge in COVID-19 infections.

The easing of coronavirus restrictions over the last quarter boosted exports by almost 10% from the second quarter, when they fell 2.2%, and supported internal demand, but the recovery of the tourism sector was slow while household spending rose much less than in April-June.

The National Statistics Institute's (INE) second GDP reading confirmed its flash estimates, including a steep slowdown in year-on-year growth to 4.2% after from 16.1% jump in the previous three months.

"The prospects for the fourth quarter are of a slowdown compared to the third quarter due to the surge of new infections, the Omicron variant and the fact that the country is only expected to have a budget in mid-2022," said Banco Carregosa, senior economist Paulo Rosa.

"It won't be easy for the government to reach its 4.8% growth target this year," Rosa said.

The economy shrank 8.4% in 2020, its biggest slump since 1936.

The country is gearing up for a snap election on Jan. 30 after parliament rejected the government's budget bill.

Portugal had lifted most COVID-19 restrictions by the start of October, but despite having one of the world's highest vaccination rates, a new surge of coronavirus infections has forced the government to re-impose some restrictions from Wednesday.

(Reporting by Sergio Goncalves; Editing by Angus MacSwan) ((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters Messaging: sergio.goncalves.reuters.com@reuters.net))