IMF revises Portugal’s growth forecast downwards to 1.9%

The International Monetary Fund (IMF) revised its estimate for Portuguese economic growth downwards on Tuesday, from 2.1% to 1.9% for this year.

This forecast represents a downward revision of 0.2 percentage points compared to the World Economic Outlook (WEO) estimate from October of last year.

This also falls short of the government’s forecast, which included a 2.3% growth in Gross Domestic Product (GDP) this year in the 2026 State Budget.

For 2027, the IMF now predicts growth of 1.8% in Portugal, according to the WEO update released today by the institution.

In this report, the institution highlights that the overall forecasts would be revised upwards were it not for the conflict in the Middle East, which, on the contrary, led to a cut in global growth projections.

Yet of all the countries in the Western hemisphere, Portugal’s oldest ally, the United Kingdom suffered the biggest downgrade. The IMF slashed its 2026 UK GDP growth forecast from 1.3% to 0.8%. The 0.5 percentage point cut is greater than for any of the other G7 group of seven leading industrialised nations, and comes hot on the heels of a similar downgrade from the OECD.

In the baseline scenario, global growth is expected to be 3.1% in 2026 and 3.2% in 2027, according to these estimates, “slower than the recent pace of around 3.4% in 2024-2025, and is expected to stabilise at that level in the medium term.”

Regarding the eurozone, the institution anticipates that economic growth will decrease from 1.4% in 2025 to 1.1% in 2026 and to 1.2% in 2027.

The forecast was revised downwards by 0.2 percentage points in each year, “with the effect of better-than-expected growth at the end of 2025 giving way to the negative impact of the conflict in the Middle East over time,” explains the IMF.

Source: SIC Notícias/IMF; Credits: IMF.