Lisbon, June 4, 2026 (Lusa) - The Portuguese economy is expected to grow by 1.8% in 2026 and 1.7% in 2027, according to forecasts released by the Organisation for Economic Co-operation and Development (OECD) on Thursday, which represent a downward revision compared with the December estimates.

These forecasts are more pessimistic than the government's, which has also revised its estimates for this year to 2% growth, according to the 2026 Annual Progress Report submitted to Brussels in April.

In the Economic Outlook released on Thursday, the OECD said that higher energy prices will impact the Portuguese economy and that inflation is expected to peak at 3.2% in 2026.

On the other hand, funds from the Recovery and Resilience Plan (RRP), the ‘hot’ labour market, permanent tax cuts and temporary budgetary support “will cushion the impact of energy prices and severe storms on domestic demand in 2026”, the organisation projects.

Export growth, meanwhile, “will rise gradually with external demand throughout 2027”.

As regards risks, the OECD warns that “a further fall in the household savings rate and stronger-than-expected wage growth could boost consumption but also fuel inflation”, whilst “incomplete implementation of RRP-funded projects or prolonged disruptions in energy markets could undermine the outlook”.

At the start of this year, “extreme weather events and the ongoing conflict in the Middle East slowed economic activity”, whilst inflation rose to 3.3% in April, “driven by a sharp rise in fuel prices and still-high food prices, whilst core inflation stood at 2.1%”.

The OECD forecasts that inflation will reach 3.2% in 2026 and then ease to 2.5% in 2027, as international energy prices fall and pressures on service prices slowly ease.

MES/ADB // ADB.

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