According to a report released by NECEP – Católica Lisbon Forecasting Lab, the Portuguese economy has grown 0.6 percent sequentially and 2.2 percent year-on-year in the second quarter of this year, Executive Digest reports.

"The majority of high-frequency indicators point to an improvement in economic activity and sentiment in recent months, now that the most critical phase of rising energy prices and disruptions in supply chains, caused by the conflict in the Middle East, has been overcome," reads the Summary of the Quarterly Economic Outlook.

Revised numbers

Despite these positive developments, economists caution that this estimate has difficulty incorporating the dynamics of the working-age population, which grew 0.8% quarter-on-quarter in the second quarter.

According to NECEP, the estimate for the economic growth in Portugal has been revised up from 1.5 percent to 1.8 percent following the performance projected for the second quarter of the year.

Yearly projections

Projections for 2027 remains at 1.5 percent, and 1.9 percent for 2028. In comparison, the eurozone economy is expected to only grow by 0.4 percent in 2026, a downward revision of 0.4 percentage points compared to the previous estimate.

Regarding inflation, the Consumer Price Index (CPI) is expected to increase from 2.3 percent to 2.5 percent, remaining in line with the monetary policy target of 2 percent by the end of 2028, with an intermediate value of 2.2 percent in 2027.