Portugal's economy in 2026: growing, but inflation keeps biting
The Bank of Portugal held its growth forecast and trimmed the deficit. The good news comes with a catch called prices. We unpack the numbers.
The Bank of Portugal opened its box of forecasts, and the result is bittersweet. The economy is set to grow 1.8% this year — slightly below 2025’s 1.9%, but a long way from slamming on the brakes.
The snag is inflation. The forecast was nudged up to 3.1%, from 2.8% in March, driven mostly by pricier energy during the months of Middle East tension. In other words: the country keeps moving forward, but the shopping trolley weighs more than we’d like.
Where the good news is
In the public accounts. The deficit should land at a slim 0.2% of GDP, and public debt keeps falling — from 89.7% of GDP in 2025 to 85.7% this year, aiming below 80% by 2028. That’s the kind of housekeeping that gives a country more room to respond when harder times come.
Bottom line: we’re growing slowly, spending more sensibly, but still feeling prices in our pockets. And if oil keeps easing after this week’s deal, some of that pressure may start to lift.
By Beatriz Mota
Illustrative · Photo: Markus Winkler / Pexels
