Finance: Economic indicator news in Portugal

The Portuguese Ministry of Finance has revised its 2026 economic growth projection to 2% and now expects a neutral public balance of 0% of GDP, down from a previous 0.1% surplus. Prime Minister Luís Montenegro's government cited the impact of early-year storms and geopolitical tensions in the Middle East as key factors, while also raising the expected inflation rate to 2.5%.

The average annual salary in Portugal reached 24,800 euros in 2024, a 7% increase from the previous year. Despite this growth, the Business Roundtable Portugal association reports that Portuguese earnings remain 38% lower than the European Union average of 39,800 euros.

A new World Bank report projects that energy prices will increase by 23.6% in 2026 due to ongoing conflict in the Middle East. This rise is expected to be the highest since the start of the war in Ukraine, with significant impacts also anticipated for fertilizer and metal costs.

The value of gold reserves held by the Bank of Portugal (Banco de Portugal or BdP) rose by 46% in 2025, reaching 45 billion euros despite the quantity of gold remaining unchanged at 382.7 tonnes. While the central bank's total balance sheet grew to 211 billion euros, it reported a loss of 304 million euros for the year, which was covered by accumulated provisions. Governor Álvaro Santos Pereira noted that the national banking sector remains stable and continues to reduce debt levels.

The state-owned company Infraestruturas de Portugal (Infraestruturas de Portugal or IP) recorded a net profit of 135 million euros in 2025, the highest value since its creation in 2015. This 8.8% increase occurred despite a reduction in toll revenue following the end of certain toll-free road schemes (SCUT). Meanwhile, the government has selected Paulo Carmona, the current director-general of the Directorate-General for Energy and Geology (Direção-Geral de Energia e Geologia or DGEG), to serve as the next president of the company.

The number of unemployed people registered with the Institute for Employment and Vocational Training (Instituto do Emprego e Formação Profissional or IEFP) fell by 10.2% in March compared to the same month last year. Data shows 295,756 individuals were registered at the end of March, marking a 3.1% decrease from February. The most significant reductions occurred in the North, Azores, and Madeira regions.

Socialist Party (Partido Socialista or PS) Secretary-General José Luís Carneiro recently accused the government of overseeing the second-highest tax burden in 15 years. Prime Minister Luís Montenegro disputed the claim during a parliamentary debate. Official data from the National Statistics Institute (Instituto Nacional de Estatística or INE) confirms the tax burden, defined as the weight of tax and social contribution revenues in the GDP, reached 35.4% in 2025.

Portugal's year-on-year inflation reached 2.7% in March 2026, up from 2.1% in February, primarily driven by a 5.8% surge in energy prices. This spike, linked to geopolitical tensions in the Middle East, accounts for over half of the total inflation increase. While the broader Eurozone labour market is expected to remain resilient, the rising cost of living remains a significant concern for the national economy.

Global oil prices fell significantly on Friday following the announcement that the Strait of Hormuz has been reopened to commercial traffic. While European stock markets saw gains, the Lisbon stock index, the PSI, fell as energy companies like Galp experienced an abrupt correction in share prices. The reopening follows a ceasefire agreement between Israel and Lebanon, though the long-term stability of the route remains a focus for investors.

Nazaré Costa Cabral, president of the CFP, has publicly criticized Finance Minister Joaquim Miranda Sarmento for comments she described as offensive and unfair. The dispute follows the minister's questioning of the institution's technical independence and credibility regarding its budget forecasts.

The Public Finance Council (Conselho das Finanças Públicas or CFP) has revised its 2026 economic outlook, now projecting a slight budget surplus of 0.1% of GDP. While the institution lowered its growth forecast to 1.6% due to external pressures, including energy price volatility, it remains more optimistic than the government's previous deficit projections.

Global oil prices have climbed above 100 dollars per barrel following a US-led blockade of the Strait of Hormuz. The move, announced by Donald Trump, aims to restrict Iranian oil revenues amid collapsing diplomatic negotiations. The situation has triggered significant market uncertainty and increased costs for energy and consumer goods in Portugal.

Shares of the Portuguese energy company Galp fell nearly 8% on Wednesday following a ceasefire agreement between the United States and Iran. The deal, which includes the reopening of the Strait of Hormuz, caused a broad decline in oil company stocks across European markets. While European indices saw gains, the Portuguese PSI index remained relatively flat due to the impact of the energy sector's performance.

The cost of an essential basket of 63 food products, monitored by the consumer protection association Deco Proteste, has reached a record high of 257.95 euros. This represents an increase of 2.95 euros in just one week, with prices for items like pasta showing significant spikes. The current cost is 37.42% higher than it was four years ago.

Fuel prices in Portugal are set to increase again on Monday, with diesel expected to rise by up to nine cents per litre and petrol by up to four cents. Despite the government applying a new discount to the tax on petroleum products (Imposto sobre os Produtos Petrolíferos or ISP), international market volatility continues to drive costs higher. This marks the fifth consecutive week of rising prices linked to the ongoing conflict in the Middle East.

Global food prices increased by 2.4% in March, marking the second consecutive month of growth according to the Food and Agriculture Organization (Organização para a Alimentação e a Agricultura or FAO). The rise is primarily attributed to higher energy costs linked to the ongoing conflict in the Middle East. While cereal prices rose by 1.5%, rice prices saw a 3% decline.

Consumer confidence in Portugal has dropped to its lowest level since December 2023 as the conflict in the Middle East fuels fears of rising prices. Data from the National Statistics Institute (Instituto Nacional de Estatística or INE) shows a sharp decline in economic sentiment across the retail and construction sectors. European Central Bank (Banco Central Europeu) President Christine Lagarde warned that the global energy shock resulting from the crisis is currently being underestimated.

The Lisbon stock exchange (Bolsa de Lisboa) closed Monday with a 2.11% increase, reaching 9,069.55 points and outperforming major European markets. The growth was primarily driven by the energy group EDP and the retail giant Sonae, both of which saw share prices rise by more than 3%. Of the 16 companies listed on the PSI index (Índice PSI), 14 ended the day with gains.

Fuel costs in Portugal have risen sharply since the start of the conflict in the Middle East, with diesel prices increasing by 30% and petrol by 14%. A 50-litre tank of diesel now costs approximately 104 euros, up from 80 euros just over a month ago. While the government has extended some tax relief measures, the Bank of Portugal (Banco de Portugal) warns that rising energy costs continue to contribute to economic instability.\n\nUpdate: Diesel prices exceed two euros as sector groups demand support\n\nDiesel prices have risen to 2.232 euros per litre, while petrol prices saw a slight decrease to 1.976 euros. The National Confederation of Agricultural Cooperatives (Confagri) and the National Association of Public Road Freight Carriers (ANTRAM) have both criticized recent government support measures as insufficient to offset rising production costs. Retailers also warned of a significant price increase for gas cylinders (garrafas de gás) starting this Wednesday.

Portugal achieved a budget surplus (excedente orçamental) of 0.7% of GDP in 2025, totaling over two billion euros. Finance Minister Joaquim Miranda Sarmento described the result as historic but warned of a more demanding economic environment in 2026. The surplus was driven by high employment and social security contributions, though critics point to significant cuts in planned public investment. Residents should note that while the national accounts are balanced, the government expects slower growth ahead.

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.

Update: Portugal records 0.7% budget surplus for 2025

The National Statistics Institute (Instituto Nacional de Estatística or INE) confirmed that Portugal ended 2025 with a budget surplus (excedente orçamental) of 0.7% of GDP, significantly higher than the government's 0.3% forecast. Finance Minister Joaquim Miranda Sarmento stated the result provides important financial security, though opposition parties argue the surplus was achieved at the expense of public services. Taxpayers should be aware that this fiscal performance may influence future government spending on infrastructure and social support.

A new study from the Bank of Portugal (Banco de Portugal) shows that median-income families now face a housing effort rate (taxa de esforço) of 48%, well above the recommended 40% limit. In response to housing and competitiveness challenges, the government is reallocating 2.5 billion euros from the Portugal 2030 (Portugal 2030) EU funding framework. Those seeking housing should note that mortgage payments in some municipalities have nearly doubled over the last four years.

Update: Bank of Portugal reports 140% house price rise since 2016

The Bank of Portugal reports that housing prices have surged by 140% between 2016 and 2025, with bank valuations reaching a new record of 2,122 euros per square meter in February. In response to the crisis, the Lisbon City Council (Câmara Municipal de Lisboa) has approved a 128 million euro investment to renovate housing and public infrastructure through municipal agencies. Lisbon residents should note that this funding targets both affordable rentals and local schools.

A new analysis indicates that Portugal is among the Eurozone countries most affected by European Central Bank (Banco Central Europeu) interest rate increases. Because a high proportion of Portuguese mortgages (crédito habitação) have variable rates, rising costs lead to a sharper contraction in household spending compared to other European nations. Economists also warn that the national economy is showing signs of slowing down due to broader European trends and geopolitical tensions. Those with variable-rate mortgages should monitor ECB policy shifts closely for impacts on their monthly budgets.

European budgetary rules protect countries that maintain a “budgetary situation close to balance,” meaning a deficit of less than 0.5%, from the opening of an excessive deficit procedure.

Finance Minister Joaquim Miranda Sarmento announced that the 2025 budget surplus (excedente orçamental) will be a “pleasant surprise” when official data is released this Thursday by the National Statistics Institute (Instituto Nacional de Estatística or INE). While the government previously forecast a surplus of 0.3% of GDP, the final figure is expected to be significantly higher. However, officials warned that 2026 may face a deficit due to the economic impact of recent storms and international conflicts. Residents should note that a strong surplus often influences government decisions on tax cuts and public investment.

The total value of housing sales in Madeira fell to €968.8 million in 2025, a 5.6% decrease from the previous year. Data from the Regional Directorate of Statistics (Direção Regional de Estatística) shows a particularly sharp 30.9% decline in the sale of new homes. Property owners and potential buyers in the archipelago should note that while new builds saw a slump, the market for existing homes remained more resilient.

Conflict between Israel and Iran is impacting Portuguese households through rising energy and food costs. A 50-liter tank of fuel is now 11.75 euros more expensive than before the war, with further risks if the Strait of Hormuz (Estreito de Ormuz) closes. The International Energy Agency warns of a massive global supply drop this month. Residents should note that these pressures may also lead to interest rate hikes.

Minister of National Defence Nuno Melo defended a 5.8 billion euro investment in the armed forces through the Instrument of Action for European Security (Instrumento de Acção para a Segurança da Europa or SAFE). The government claims the loans are a “unique opportunity” to modernize equipment and cover full life cycles of military assets. Portugal has now reached the NATO target of 2% of GDP in military spending. Taxpayers should note that the government has refuted accusations of a lack of transparency regarding these loans.

The European Investment Bank (EIB) Group increased its lending to Portugal by 43% in 2025, reaching three billion euros. EIB President Nadia Calviño and Finance Minister (Ministro das Finanças) Joaquim Miranda Sarmento announced that 1.5 billion euros is specifically earmarked for social and affordable housing. Other major investments include nearly one billion euros for the high-speed rail project between Porto and Lisbon. Those seeking affordable housing should note that these funds aim to increase supply across the country quickly.

European Central Bank (Banco Central Europeu or BCE) President Christine Lagarde has promised to do “whatever is necessary” to keep inflation under control. Lagarde noted that while the current situation differs from the 2022 energy crisis, the conflict in the Middle East poses risks to price stability. Taxpayers should be aware that the bank remains vigilant against sudden spikes in energy costs that could impact the cost of living.

Minister of Environment and Energy Maria da Graça Carvalho stated that fuel prices (preços dos combustíveis) could decrease next week if international Brent crude prices remain low through Friday. The government is monitoring the impact of the Middle East conflict on energy costs and is prepared to offer tax relief via the tax on petroleum products (Imposto sobre os Produtos Petrolíferos or ISP). Drivers should note that a discount applies if prices rise by more than 10 cents.

Update: Portugal to release 10% of strategic oil reserves

Prime Minister Luís Montenegro announced that Portugal will release two million barrels of oil—roughly 10% of its strategic reserves—to help stabilize fuel prices. This move follows an International Energy Agency agreement to release 400 million barrels globally due to supply risks in the Strait of Hormuz.

A new report from the Migration Observatory (Observatório das Migrações) reveals that immigrants contributed over €4.15 billion to the Social Security (Segurança Social) system in 2025. This figure represents 14% of the total revenue, highlighting the significant economic role of foreign residents in the national welfare system. Residents should note that this contribution comes despite immigrants making up a smaller percentage of the overall population.

The President of the Eurogroup, Kyriakos Pierrakakis, warned that the eurozone must prepare for a prolonged period of economic instability due to the conflict in the Middle East. He noted that while the European economy is resilient, potential disruptions to maritime transport and energy supplies could threaten the 2% inflation target. Residents should be aware that these external shocks may lead to sustained pressure on energy prices and supply chains in the coming months.

The warning was issued by the president of the Eurogroup, Kyriakos Pierrakakis.

G7 finance ministers, including Portugal's Joaquim Miranda Sarmento, decided not to release strategic oil reserves despite prices rising near $120 per barrel due to Middle East tensions. Sarmento warned that releasing limited reserves would only provide temporary relief and should be saved for actual emergency supply disruptions. Portugal currently maintains reserves covering approximately 90 days of consumption, which the government views as a vital buffer against total supply failure. Drivers and residents should be aware that fuel prices may remain volatile as international markets react to the closure of the Strait of Hormuz.

Update: Diesel prices see historic 20-cent daily surge

Fuel prices in Portugal experienced a significant jump this Monday, with diesel (gasóleo) increasing by 20 cents per litre, surpassing the price of petrol for the first time since 2022. While Brent crude prices fluctuated wildly, touching $119 before closing near $99, the immediate impact at Portuguese pumps reflects the high volatility in global energy markets.

The government is confident that the European Commission will not oppose its temporary discount on the Tax on Petroleum and Energy Products (Imposto sobre os Produtos Petrolíferos or ISP) for diesel. Finance Minister Joaquim Miranda Sarmento stated that the measure is extraordinary and temporary, designed to mitigate the impact of high energy prices caused by conflict in the Middle East. Drivers should note that the discount is intended to provide immediate relief at the pump while the government monitors international oil market volatility. The tax relief remains a key part of the national strategy to manage rising living costs.

ECO reports that Portugal's household savings rate rose to 12.5% of disposable income in Q3 2025, the highest level in over 20 years, but warns many people confuse saving with investing and so miss higher returns. The piece uses new data from the Instituto Nacional de Estatística (INE) to argue for better financial education and clearer channels to direct savings into appropriate investments. Savers and anyone planning longer-term finances should review where their money is held and seek basic investment advice if needed.

José Luís Carneiro, secretary-general of the Socialist Party (Partido Socialista or PS), said the government should prepare a targeted plan to blunt the economic effects of the war in Iran, citing expected rises in fuel, food and housing-loan costs. Former economy minister António Costa Silva urged rapid action to identify energy‑intensive sectors and design specific support, warning that Portugal's growth and export performance are already weaker than expected. Businesses in transport, food distribution and energy-intensive manufacturing should follow any government announcements on sectoral relief measures.