Lisbon, June 6. 2025 (Lusa) - The Bank of Portugal (BdP) has sharply revised downwards its estimate for Portuguese economic growth this year, from 2.3% to 1.6%, according to its Economic Bulletin for June, released on Friday.

This revision compared to the last bulletin, in March, came after the contraction in activity in the first quarter of the year, with a 0.5% quarter-on-quarter reduction in Gross Domestic Product (GDP), which "was not anticipated", according to the BdP in the document.

These forecasts are therefore more pessimistic than those of the government, which in the State Budget for 2025 had pointed to GDP growth of 2.1% but revised this projection upwards to 2.4% in the Annual Progress Report submitted to Brussels.

On the other hand, the BdP revised its forecasts for 2026 upwards from 2.1% to 2.2%, while the estimate for 2027 remains at 1.7% economic growth.

The institution led by Mário Centeno explained that "the composition of growth changes over the projection horizon", and that compared to 2024, "growth will be relatively more supported by investment in 2025-26 and exports in 2027".

With regard to inflation, the central bank points out that the rate "should stabilise at below 2% throughout the projection horizon".

As for the labour market, the BdP forecasts a slowdown in employment and wages, but with the unemployment rate stable at 6.4%.

MES/ADB // ADB.

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