Allianz Trade revised its growth estimate for the Portuguese economy, now forecast at 1.5% for 2025, slightly above the 1.3% previously estimated. The main driver of this growth will be private consumption.
For 2026, experts maintain the growth forecast at 1.5%, supported by domestic demand.
Expectations for the Portuguese economy are more optimistic than those of the Eurozone, which is expected to see a slowdown in growth to 0.9% in 2026, compared to 1.2% in 2025. Allianz Trade believes that the recovery in domestic demand, especially in Germany, will contribute to a positive economic performance.
Germany is, however, facing a third year of stagnation, with GDP growth projected at just 0.1% for 2025. Forecasts for 2026 indicate a modest recovery of 1.0%. However, economists warn that the German economy faces a shortage of resources and is heavily dependent on exports, which makes it vulnerable to global fragmentation and international competition, especially from China.
France is expected to grow 0.7% in 2025 and 1% in 2026, benefiting from the recovery of the credit cycle, although political instability represents a risk. In contrast, Spain, one of Portugal’s main partners, is expected to grow 2.6% in 2025 and 1.9% in 2026, due to its service-oriented structure.
Perspectives of the world economy
The world economy is expected to grow 2.7% in 2025 and 2.5% in 2026. In the United States, forecasts point to growth of 1.8% in 2025 and 1.6% in 2026. Allianz Trade highlights that political uncertainty and rising tariffs have limited business investment, although private consumption has shown resilience, driven by higher incomes.
The Allianz Trade analysis also mentions that “restrictive immigration policy is increasingly limiting the supply of labor, while high tariffs will begin to be progressively passed on to consumer prices”, which could put pressure on household consumption. Despite this, “we expect the US economy to avoid a recession”, the same note adds.
Finally, China, the second largest economy in the world, is expected to grow 4.8% in 2025 and 4.2% in 2026.
Inflation in the Eurozone and Portugal
Inflation in the Euro Zone is approaching the European Central Bank’s (ECB) target of 2%, with estimates of 2.1% for 2025 and 1.9% for 2026. In Portugal, inflation is expected to be 2.4% in 2025, falling to around 2% in 2026. Among the zone’s main economies, Germany is expected to end 2025 with a rate of 2.1% and 1.9% in 2026, while France is expected to register 1% in 2025 and 1.5% in 2026.