The Portuguese economy is projected to have grown by 1.9% year-on-year in the second quarter of 2025, as estimated by economists from the Católica-Lisbon Forecasting Lab (NECEP), who have revised their annual growth forecast down to 1.7%.
In April, NECEP economists had already downgraded the annual growth forecast to 2%, now revising it once again by 0.3 percentage points to 1.7%, as stated in the note released today.
This revision follows the decline in the first quarter, driven by a private consumption deflator significantly exceeding inflation, the economists explain.
Forecasts for 2026 and 2027 remain at 2% and 2.2% growth respectively, although the “forecast ranges remain high due to uncertainty surrounding the global economy’s development, particularly the potential impact of tariffs introduced and announced by the U.S. administration in early April.”
On a quarterly basis, the projection indicates that the Portuguese economy should have grown by 0.7% quarter-on-quarter and 1.9% year-on-year in the second quarter of this year, “offsetting the 0.5% quarterly contraction of the previous quarter.”
NECEP highlights the geopolitical risks contributing to forecast uncertainty and notes that in Portugal, “the focus is now on changes to the IRS and migration policies, which may have implications not only for the budget but also for economic activity and prices.”
