Portugal’s economic outlook is strengthening, with new projections from the European Commission indicating a more robust foundation for continued growth over the next two years.
According to the latest forecast, GDP is expected to expand by 1.9% in 2025 and 2.2% in 2026, marking an upward revision from previous estimates and reinforcing confidence in the country’s recovery trajectory.
A key driver of this improved performance is the surge in domestic demand, supported by a robust labour market and a series of targeted fiscal measures.
Rising wages, adjustments to withholding-tax tables, and the distribution of a special pension bonus have all helped lift household purchasing power.
These factors, combined with recovering activity in the construction sector—bolstered by EU recovery funds—have added further momentum to the economy’s forward push.
Export performance has lagged earlier expectations, while import volumes have continued to grow at a faster pace. As a result, the trade deficit remains wide, with meaningful narrowing now projected to begin in 2026 as global demand gradually improves.
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On the fiscal front, Portugal is making steady progress in reducing public debt. The Commission forecasts the country’s debt-to-GDP ratio to fall from 93.6% in 2024 to 91.3% in 2025, and further down to 89.2% in 2026.
These improvements reflect healthier budget balances, reduced borrowing requirements, and ongoing policy discipline.
Within the broader euro-area landscape, Portugal is emerging as one of the more resilient performers.
While many EU economies face sluggish demand and structural constraints, Portugal stands out thanks to its effective deployment of EU recovery funds—including the Recovery and Resilience Facility—alongside post-pandemic reforms and a labour market that has remained notably robust.
Paul Stannard, chairman and founder of Portugal Pathways and Portugal Investment Owners Club, commented on the latest developments.
“Portugal is entering a phase where domestic momentum is clearly taking charge, and while external headwinds remain, the country now offers a compelling mix of investment opportunity, lifestyle appeal and economic resilience”, he said.
“Portugal appears positioned for a more stable, demand-driven expansion—supported by improving fiscal metrics, rising investor confidence, and a domestic economy gaining decisive momentum.”
Portugal's economy has been bolstered in recent years by its Golden Visa residency-by-investment programme.
According to a new report by the World Digital Foundation (WDF), the Golden Visa has generated a significant €54 billion for the economy.
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Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.
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