Economic Growth in Portugal

By Sergio Goncalves

LISBON (Reuters) – Provisional indicators suggest that Portugal’s economic growth accelerated in the fourth quarter, giving the government increased confidence in a stronger expansion for this year compared to 2024, stated Finance Minister Joaquim Miranda Sarmento on Wednesday.

Sarmento referenced the Bank of Portugal’s daily composite activity indicator and preliminary data on investment and private consumption. He remarked, “The fourth quarter numbers showed significant economic acceleration. These are still provisional figures, but they indicate a strong performance and strengthen our forecast of 2.1% economic growth in 2025, despite external uncertainties.”

He acknowledged the “enormous international uncertainty” stemming from potential geopolitical shocks, trade wars among major economies, and a challenging economic situation in Germany.

The government anticipates a 1.8% expansion in gross domestic product (GDP) for 2024.

Miranda Sarmento expressed confidence that 2025 would be successful, provided there are no major changes in the international context. The economic outlook also supports the government’s expectation of another budget surplus this year, projected at 0.3% of GDP, after a 0.4% surplus in 2024. He noted that all international institutions expect a surplus for Portugal, although the Bank of Portugal foresees a slight 0.1% deficit.

The National Statistics Institute is set to release its flash estimate of fourth-quarter GDP on January 30. Notably, Portugal’s economy grew by 0.2% in the third quarter compared to the previous one, maintaining the same rate as the last three months, and marking a year-on-year increase of 1.9%.