The Portuguese economy is set to continue expanding over the next few years, with the European Commission forecasting growth of 1.9% in 2025 and 2.2% in 2026. The latest autumn economic outlook revises upward the estimate for this year while keeping next year’s projection unchanged.
According to Brussels, domestic demand will remain the main driver of Portugal’s economic performance, even as uncertainties in global trade persist. These projections are slightly more cautious than those put forward by the Portuguese government, which anticipates GDP growth of 2% in 2025 and 2.3% in 2026 in the State Budget.
For 2025, the Commission adjusted its previous estimate from 1.8% to 1.9%, and maintained its expectation of 2.2% growth for 2026. Looking further ahead, Brussels foresees an expansion of 2.1% in 2027.
The upward revision follows the preliminary results for the third quarter of 2025, which revealed an increase of 0.8%. This improvement was supported mainly by a pension bonus and changes to personal income tax withholding applied in August and September, measures that helped stimulate consumer spending.
Private consumption also benefited from rising employment and higher wages, reinforced by a reduction in interest rates on household loans. Investment registered strong growth as well, reflecting a significant rebound in the construction sector during the second quarter of 2025.
However, export momentum weakened substantially. Global trade tensions and broader international uncertainty contributed to this slowdown. Foreign tourism also began to cool after several years of robust activity, although domestic tourism continued to expand rapidly.
Looking to the years ahead, the Commission expects private consumption to maintain a solid pace, supported by growing household income and a gradual decline in the savings rate. Investment should accelerate even more quickly, particularly in 2025 and 2026, when the deployment of Recovery and Resilience Plan funds reaches its highest intensity.
Imports are projected to keep rising at a faster rate than exports, although Brussels anticipates that this gap will start to narrow from 2026 onwards.