Review of Portugal’s GDP still puts pressure on government’s target

Portugal’s National Statistics institute (INE) revised Portugal’s growth upwards on Tuesday with the economy growing a further €6.6Bn for 2023 and 2024 in real terms.

And Portugal’s economy grew more than expected at the start of this year but there is still considerable pressure for the government to stick to its targets. The economy will have to grow at a demanding rate of 0.9% for each of the next two quarters in order for the Finances minister, Joaquim Sarmento to achieve his target of 2% by the end of the year.

With the upwards review, Portugal’s economy grew 3.1% in 2023 and 2.1% in 2024, up 0.5% and 0.2% on what had originally been stated.

And Portugal’s economy cooled less than expected in the first quarter (-0.3%) and in the second quarter increased by a further 0.7%. Its was a QoQ increase of 0.1% for each of the quarters.

However, these modest gains are unlikely to be enough to bring the government’s target for the whole of 2025 to 2% growth in GDP which so far looks to be just 1.3% for the year.

The real growth in the economy in the first six months of the year, in a hypothetical but very real risk of stagnation for the second half of the year, would mean that Portugal’s GDP growth would be 1.3% for 2025 overall.

As for Portugal’s accumulated public debt, this has been revised upward for 2024 to 93.6% of GDP.

The INE numbers also show that the government is maintaining its commitment to a budget surplus of 0.3% of GDP this year, and now predicts a fall in the ratio of public debt to 90.2% of GDP this year. (In April it had thought it would be 91.8%)

Source: INE; Image: MANUEL DE ALMEIDA/LUSA. Copyright: © 2025 LUSA – Agência de Notícias de Portugal, S.A.