The Portuguese economy is showing significant dynamism, according to Joaquim Miranda Sarmento, as he arrived for the Eurogroup meeting in Brussels. He highlighted the economy’s strong performance following regular technical meetings with the Ministry of Finance and the European Commission prior to their forecasts.
The minister noted that the Portuguese economy is currently in a good phase. Last week’s employment and salary figures showed robust employment growth up to September and even more notable salary increases, reflecting a rise in real incomes for Portuguese citizens.
Furthermore, budget execution up to September has been robust, suggesting a confidence in achieving surpluses both this year and next year, stated the minister. Despite 2026 being a more demanding year due to a significant amount of PRR loans equivalent to 0.7%-0.8% of GDP, which apply greater budgetary pressure, the economy’s performance and budget execution indicate balanced public accounts and continued public debt reduction.
The State Budget for 2026 forecasts a 2% GDP growth for this year, a surplus of 0.3%, and a reduction of public debt to nearly 90% of GDP. The forecast for the next year anticipates a 2.3% GDP growth, a 0.1% surplus, and public debt close to 88%, aiming to dip below 90% of GDP for the first time since 2009.
In its latest economic forecasts released in May, the European Commission projected that Portugal would achieve a 0.1% GDP surplus this year, turning into a 0.6% deficit in 2026. Additionally, the Commission revised Portugal’s economic growth forecast to 1.8% for this year, with a projected 2.2% growth by 2026.
The European Commission’s autumn economic forecasts are set to be released next Monday, amid significant external and internal uncertainties for EU economies. Key factors include persistent underlying inflation and the European Central Bank’s restrictive monetary policy affecting investment and private consumption. Energy price developments, highly dependent on geopolitical situations in the Middle East and the war in Ukraine, also play a critical role, alongside concerns about global trade, the slowdown in the German economy, and budget tensions in several eurozone countries, notably France.
