Santa Maria da Feira, Portugal, May 29, 2026 (Lusa) – The minister of economy and territorial cohesion said on Friday that Portuguese people are living better because the country's income growth has outpaced inflation in recent years.

"In 2025, we were the third country in Europe where wages grew the most, and even in the first quarter of 2026, wages grew by 6.6% […] Even though inflation is now high, standing at 3.3%, it is half the value of wage growth. This means that people are, despite everything, living better," Castro Almeida said.

The minister, who spoke to journalists in Santa Maria da Feira, in the Aveiro district, was reacting to flash estimate data released on Friday by Statistics Portugal (INE). The figures point to a stabilisation of the annual inflation rate at 3.3% in May, driven once again by fuel prices.

Government officials remain concerned about the rise in inflation, despite the wage growth, he said.

 "Every point of inflation eats into wage increases. What we want is for wages to give people greater capacity to solve their problems and make their purchases," he stated.

Companies need to be more competitive and labour must become more productive to ensure people can earn more per hour, produce more per hour, and secure better incomes, he said.

"I am aware that people become very anxious when petrol prices rise. Petrol is a very powerful psychological factor. Supermarket food prices are also showing an increase above average inflation, which is very disturbing. However, the government must guarantee that wage growth remains above inflation," Castro Almeida concluded.

JDN/RYOL // AYLS

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