The Bank of Portugal (Banco de Portugal) has revised its 2026 economic growth forecast downward, citing geopolitical instability and recent extreme weather events. While the labor market remains stable, employment growth is expected to slow throughout 2025 due to tighter immigration rules and lower economic growth. Consumers should also prepare for higher costs in the food basket (cabaz alimentar) starting in April as Middle East tensions impact global supply chains.
Economic growth slows as food prices set to rise
Thursday, 26 March 2026AI summary
Context & Explainers
Portugal's annual inflation rate of 3.1% is slightly above the Eurozone average of 2.6% but lower than neighboring Spain at 3.8%. For comparison, inflation stands at 3.3% in the United States, 2.8% in Germany, and 2.0% in the United Kingdom. Consumers should note that while the headline rate is moderate, price volatility in food and fuel continues to impact the monthly cost of living for residents.
