IMF reviews again in low growth of the Portuguese economy (to 1.7%)

ANDthis projection represents a downward review of the estimate of the World Economic Outlook (WEO) of April, which had already been reviewed at 0.2 percentage points compared to last October.

It is also below the government's forecast, which in the annual progress report sent to Brussels by the end of April had foreseen a 2% increase in Gross Domestic Product (GDP) this year.

The IMF team stresses that the negative effects of the Middle East war should offset the impact of larger European Union funds.

In addition, “severe storms have damaged growth at the beginning of the year, but reconstructions and repairs are expected to boost activity later, so that the annual impact of storms should be largely neutral,” he says.

For 2027, the IMF is now forecasting growth of 1.6% in Portugal, and from 1.8% to 2028, according to the update of the forecasts released today by the institution.

“ The additional deceleration expected in 2027 mainly reflects the end of the investment financed by the Recovery and Resilience Plan (PRR)”, he explains.

Inflation (measured by the Harmonised Index of Consumer Prices) is expected to rise to 3.4% in 2026, driven by rising commodity prices and to a lesser extent by wage pressures, before falling from 2027 to 2.3%.