LISBON (Reuters) -The Bank of Portugal on Tuesday raised the economic growth outlook for this year to 1.9% from 1.6% it predicted in June, citing stronger-than-expected private consumption while exports growth was slowing down.
It expects gross domestic product, which expanded 2.1% in 2024, to grow by 2.2% next year and 1.7% in 2027, the same as previously forecast.
In its quarterly economic bulletin, the central bank saidthat the upward revision of this year’s GDP forecast reflected the most recent national accounts data and “higher projected growth for the second half of the year”.
It said that private consumption, which traditionally represents more than 60% of GDP, is now seen growing 3.3% this year after 3% in 2024, boosted by rising disposable income of households thanks to higher wages and lower taxes on labour income and pensions.
Conversely, exports growth was revised lower, to 1.1% in 2025, “due to trade tensions, uncertainty, and the appreciation of the euro”, after increasing by 3.1% last year.
The economy grew 0.6% in the second quarter from the previous three months when it shrank 0.4%. It also grew 1.9% from a year earlier.
The government expects the economy to grow by around 2% this year.
(Reporting by Sergio Goncalves; editing by Andrei Khalip)
