Economic projections have been adjusted from the last bulletin in March following the contraction in activity during the first quarter of the year, with a 0.5% quarter-on-quarter decrease in Gross Domestic Product (GDP) that “was not anticipated,” according to the Bank of Portugal (BdP) in the document.
These forecasts are therefore more pessimistic than those of the government. In the State Budget for 2025, the government projected a 2.1% GDP growth but revised this upward in the Annual Progress Report, submitted to Brussels, to 2.4%.
Conversely, the BdP has adjusted its 2026 forecasts upward, from 2.1% to 2.2%, while the estimate for 2027 remains at an economic growth rate of 1.7%.
The institution, led by Mário Centeno, notes that “the composition of growth changes over the projection horizon,” indicating that compared to 2024, “growth will be relatively more supported by investment in 2025-26 and by exports in 2027.”
Regarding inflation, the central bank predicts that the rate “should stabilize at values below 2% throughout the projection horizon.”
For the labor market, the BdP anticipates a slowdown in employment and wages, with the unemployment rate remaining stable at 6.4%.
