The International Monetary Fund (IMF) has sharply upgraded its growth forecast for Portugal, predicting the economy will expand by 2.1% this year and 1.9% in 2027.
The new projections, published on Tuesday in the IMF’s latest World Economic Outlook, represent a significant improvement on its previous expectations.
As recently as June, the Fund was forecasting growth of just 1.7% for 2026 and 1.6% for 2027.
However, despite the upgrade, the IMF remains more cautious than the Portuguese government.
The recently presented 2027 State Budget proposal forecasts GDP growth of 2.3% this year and 2.1% next year, with the government highlighting continued growth above the eurozone average.
The difference is even more noticeable when it comes to inflation.
The IMF expects inflation in Portugal to reach 3.2% this year, before easing only slightly to 3% in 2027.
The government is more optimistic, forecasting average inflation – measured by the Harmonised Index of Consumer Prices – of 2.9% in 2026 and 2.3% next year.
On unemployment, the IMF expects the rate to remain relatively stable, at around 5.9% in both 2026 and 2027.
Michael Bruxo
Journalist for the Portugal Resident.