- First-Quarter GDP Expansion Accelerates to 2.3%
LISBON – Portugal’s economy expanded at a stronger pace in the first quarter of 2026, supported by robust domestic demand and a sharp rise in investment, according to data released on Friday by Statistics Portugal.
The country’s gross domestic product (GDP) grew by 2.3 percent year-on-year in the January–March period, accelerating from 1.9 percent growth recorded in the previous quarter. The figure confirmed the preliminary estimate published on April 30.
On a quarterly basis, however, economic output remained unchanged after posting a 0.9 percent increase in the final quarter of 2025.
Domestic Demand Emerges as Key Growth Engine
Domestic demand strengthened significantly during the quarter, rising by 4.1 percent compared with 3.0 percent in the previous three months.
Investment activity played a leading role in the economic expansion, surging by 9.2 percent year-on-year—almost double the 4.9 percent increase recorded in the fourth quarter of 2025. The strong investment performance highlights growing business confidence and continued capital spending across the economy.
Trade Activity Shows Positive Momentum
Portugal’s external sector also contributed positively to growth.
Exports increased by 1.7 percent following a 0.5 percent decline in the preceding quarter, signaling a recovery in international demand for Portuguese goods and services.
Imports rose at an even faster pace, climbing 5.5 percent after a 1.9 percent increase in the previous quarter, reflecting stronger domestic consumption and investment-related demand.
Inflation Remains Stable Despite Energy Price Surge
In a separate report, Statistics Portugal said consumer price inflation remained broadly stable in May.
Headline inflation eased slightly to 3.27 percent from 3.35 percent in April. The main upward pressure on prices continued to come from energy costs, which surged by 13.15 percent compared with a year earlier.
Meanwhile, core inflation—which excludes volatile fresh food and energy prices—held steady at 2.2 percent, indicating that underlying price pressures remained contained.
Balanced Economic Outlook
The latest figures point to a resilient Portuguese economy, with strong domestic demand, rising investment, and recovering exports helping sustain growth. At the same time, stable core inflation suggests that broader price pressures remain under control despite elevated energy costs, providing a balanced outlook for the months ahead.
BY: The Times Union
