The National Institute of Statistics (INE) will release data on the growth of the Portuguese economy for the third quarter of the year this Thursday, with analysts believing it will range between 1.9% and 2.2% year-on-year.
Economists project that the country’s GDP in the third quarter is expected to have accelerated year-on-year but decelerated quarter-on-quarter, to between 0.3% and 0.6%.
The economic research group from the Centro de Estudos Aplicados at Católica Lisbon School of Business & Economics forecasts that the Portuguese economy grew by 0.6% quarter-on-quarter and 2.2% year-on-year in the third quarter, following growth of 0.7% quarter-on-quarter and 1.8% year-on-year in the second quarter.
The Fórum para a Competitividade estimates “the GDP for the 3rd quarter may have slowed quarter-on-quarter from 0.7% to between 0.3% and 0.5%, resulting in a year-on-year acceleration from 1.8% to between 1.9% and 2.1%.”
BCP’s economic studies area projects that, in the third quarter of 2025, the Portuguese GDP should have grown by 0.6% quarter-on-quarter and 2.2% year-on-year, following the previous quarter’s growth of 0.7% quarter-on-quarter and 1.8% year-on-year, according to the latest economic report.
“Domestic demand is expected to have accelerated in the third quarter, benefiting from robust growth in private consumption and gross fixed capital formation, accompanied by increased public spending,” states the report, while “external demand may have negatively contributed to GDP growth in the third quarter, with a forecasted drop in exports compared to the previous quarter, while imports are expected to grow again.”
The CIP/ISEG Economic Outlook Barometer also estimates that the Portuguese economy is likely to grow by 2.2% year-on-year in the third quarter, and 0.6% quarter-on-quarter.
The document explains the estimated growth by reinforcing private consumption and the strong performance of the industrial, commerce, and construction sectors.
Public Debt is “one of the Most Fragile Aspects of the Portuguese Economy”
The Finance Minister, Joaquim Miranda Sarmento, warned that the reduction of public debt must not be interrupted as it “remains one of the most fragile aspects of the Portuguese economy.”
Sarmento asserted that the government is on a “path marked by transformation but with a focus on balancing public accounts and reducing debt,” during the general debate on the proposed State Budget for 2026 (OE2026).
The minister highlighted the forecasts for budget surpluses for this year and the next, noting that “those who talk about exhausting room for maneuver overlook that the balances, excluding temporary expenses, are close to 1% of GDP.”
Regarding public debt, he reiterated the need to maintain the path of reduction by three to four percentage points per year.
In his initial remarks, the Finance Minister also advocated for the structural transformation of the economy, which includes “increasing competitiveness levels,” necessitating “an increase in human capital and a reduction in the bureaucracy stifling companies and citizens.”
The minister emphasized that with increased human capital and minimal bureaucracy, it will be possible to “grow the economy by 3% by the end of the legislature,” referring to the goals stated in the AD’s electoral program.
Sarmento also mentioned that the government is actively working on fiscal reforms, with plans to advance tax litigation reform and a program to combat tax fraud and evasion next year.
The OE2026 proposal projects that GDP will grow by 2% this year and 2.3% in 2026.
The government aims to achieve surpluses of 0.3% of GDP in 2025 and 0.1% in 2026. The debt ratio is projected to decrease to 90.2% of GDP in 2025 and 87.8% in 2026.
The proposal will be discussed and voted on in generality today, with a final global vote scheduled for November 27, following the detailed debate process.
