Portugal’s Economy Stalls in Q1 2026

2026-05-29 10:40 By Joana Ferreira 1 min. read

Portugal’s economy stalled in the first quarter of 2026, marking a sharp slowdown from the 0.9% growth recorded in the previous period, particularly driven by extreme weather, including Storm Kristin and heavy rainfall, which damaged infrastructure, agriculture, and buildings, particularly in the Central region, as well as the adverse effects of the Middle East conflict.

The slowdown also reflected the fading impact of government measures that had boosted household income in the second half of 2025.

Household consumption growth plummeted to 0.1% in Q1 2026 from 0.9%, while government spending rose by 0.3%, down from 0.4%.

Net external demand weighed on GDP, as exports grew by 2.1% but imports surged at a faster pace of 5.4%.

On a positive note, fixed investment increased by 1.9%, following a 1.2% gain in the previous quarter.

The Bank of Portugal warned that rising inflation and tighter financing conditions are likely to constrain consumption and investment throughout 2026.



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Portugal’s Economy Stalls in Q1 2026
Portugal’s economy stalled in the first quarter of 2026, marking a sharp slowdown from the 0.9% growth recorded in the previous period, particularly driven by extreme weather, including Storm Kristin and heavy rainfall, which damaged infrastructure, agriculture, and buildings, particularly in the Central region, as well as the adverse effects of the Middle East conflict. The slowdown also reflected the fading impact of government measures that had boosted household income in the second half of 2025. Household consumption growth plummeted to 0.1% in Q1 2026 from 0.9%, while government spending rose by 0.3%, down from 0.4%. Net external demand weighed on GDP, as exports grew by 2.1% but imports surged at a faster pace of 5.4%. On a positive note, fixed investment increased by 1.9%, following a 1.2% gain in the previous quarter. The Bank of Portugal warned that rising inflation and tighter financing conditions are likely to constrain consumption and investment throughout 2026.
2026-05-29
Portugal GDP Stalls in Q1
The Portuguese GDP stalled in the first quarter of 2026, holding the 0.9% expansion from the earlier period, to reflect the strong impact of the war in the Middle East in the Portuguese economy, according to a flash estimate. There was a negative contribution in net external demand, aligned with the surging costs of oil that Portuguese refineries import and supply pressures on European natural gas and petroleum gas. Household consumption was also lower on the squeeze in domestic purchasing power. On the other hand, investment was higher in the period. From the previous year, the GDP expanded by 2.3%.
2026-04-30
Portugal GDP Growth Revised Up in Q4
The Portuguese economy expanded 0.9% on quarter in Q4 2025, the strongest performance in a year, above initial estimates of 0.8% and compared to a downwardly revised 0.6% in Q3. The contribution of net external demand turned positive (+1.1 pp vs -0.9 pp), reflecting declines in both exports and imports of goods and services, with the decrease being more pronounced for imports. On the other hand, the contribution of domestic demand was -0.2 pp (compared with +1.5 pp in the previous quarter), driven by a decline in investment and a slowdown in final consumption expenditure. On an annual basis, the economy grew 1.9% in Q4, slowing from a downwardly revised 2.2% in Q3 but matching initial estimates. For the full year 2025, Portuguese GDP expanded 1.9%, slightly below 2.2% in 2024. Domestic demand supported the growth, driven by faster final consumption, while net external demand weighed more heavily, as exports of goods and services slowed more sharply than imports.
2026-02-27