“Economic growth has been slowing down in 2023, while the job market remains robust in a context of record employment and activity rates”, notes Brussels, in the note on Portugal. “GDP growth is expected to gradually recover over the forecast horizon”, they indicate, and for 2025 the estimate is growth of 1.8%.

On the one hand, the Commission points to expectations that “weak external demand, as well as the increase in interest expenses by families and companies, will maintain moderate economic growth in the short term”. But “increased household income, together with the projected gradual recovery in world trade volumes and progress in implementing the Recovery and Resilience Plan (PRR), should gradually improve economic performance over the forecast horizon”, he notes Brussels.

As for inflation, measured by the variation in the IHPC, it is expected to reach 5.5% this year, falling to 3.2% next year. The Government estimates a HIPC variation rate of 5.3% in 2023 and 3.3% in the following year.

Throughout this year, “inflation excluding energy and food products also followed a downward trend, but at a slower pace, as the prices of services, especially accommodation, were pressured by the increase in visits by foreign tourists and increases in salaries”.

Despite expecting some pressure on prices due to salary increases, the Commission predicts that inflation will continue to slow down next year.