Portugal is expected to grow 2.2% in 2026, exceeding the 1.2% forecast for the euro zone, according to the Economic Outlook 2026 report from the Mastercard Economics Institute.
According to the document, the country benefits from demographic gains, accelerated execution of NextGeneration EU funds and wage recovery that has already raised purchasing power above 2019 levels.
The institute attributes Portuguese performance to three central factors: higher immigration, which expanded the working-age population and helped fill skills shortages; a faster use of community funds that stimulates investment; and resilient labor markets with job creation and strong wage growth.
These elements, according to the report, explain the acceleration from 1.9% in 2025 to 2.2% in 2026 — a similar pace to Spain (2.1%).
The report also highlights trends that favor Portugal, such as the acceleration of digitalization of SMEs, which increases their relevance in retail and e-commerce, and the transition of artificial intelligence from experimental projects to productive applications, which can boost productivity.
For investors and economic authorities, the document highlights that the combination of demographic factors, EU funds and salary gains places Portugal in an advantageous position compared to the euro zone average in 2026.
The regional reading of the report anticipates that the European economy will maintain stable growth in 2026, supported by the decline in inflation to an average of 1.8%, the reduction in interest rates and the resilience of consumption.
Natalia Lechmanova, Chief Economist, Europefrom the Mastercard Economics Institute, summarizes that “the European economy in 2026 is expected to grow in a stable manner, supported by the decline in inflation, the reduction in interest rates and the resilience of labor markets, although with significant differences depending on the fiscal policies of each country”.
The same official reinforces that “European consumers benefit from solid foundations, but remain cautious and selective, preferring experiences and moderate spending on a daily basis, which supports domestic demand.”