LISBON, PORTUGAL / EuroWire / — Portugal’s economy grew 2.3 percent year on year in the first quarter of 2026, accelerating from 1.9 percent in the final quarter of 2025, official data showed, as stronger domestic demand and investment lifted annual output even as quarterly growth stalled. Statistics Portugal, also known as INE, confirmed that gross domestic product was unchanged from the previous quarter after expanding 0.9 percent in the fourth quarter.
The figures showed a mixed start to the year for Portugal’s economy, with annual GDP growth strengthening while sequential momentum flattened. Domestic demand increased 4.1 percent in the first quarter, compared with 3.0 percent in the previous three months, giving the economy its main source of support. The result kept Portugal in positive annual growth territory, but the zero quarterly reading marked a clear slowdown from late 2025.
Investment provided the strongest contribution among the domestic components, rising 9.2 percent in the first quarter after increasing 4.9 percent in the fourth quarter. The acceleration helped offset weaker external trade dynamics, as imports grew faster than exports. Private and public spending remained part of domestic demand, while the statistical release showed investment was the most pronounced area of expansion within the national accounts.
Domestic demand strengthens
Portugal’s external balance weighed on first-quarter growth because imports rose 5.5 percent, outpacing a 1.7 percent increase in exports. The trade pattern reduced the contribution of net external demand to GDP, even though exports returned to growth after declining in the previous quarter. The figures underline the importance of domestic activity in the first-quarter result, with investment and broader internal demand carrying the annual expansion.
The quarterly stagnation contrasted with the improved annual rate and reflected a narrower base of growth than the headline year-on-year figure suggested. Statistics Portugal reported the data in volume terms, which removes price changes from GDP comparisons. That measure is used to assess real economic activity and showed that output was stable compared with the fourth quarter, while remaining higher than in the same period of 2025.
Quarterly growth stalls
The first-quarter result placed Portugal’s 2.3 percent annual GDP growth above the country’s 1.9 percent expansion recorded for 2025 as a whole. The annual comparison benefited from activity levels being higher than a year earlier, while the quarter-on-quarter reading captured the loss of momentum between late 2025 and early 2026. The two measures together showed an economy expanding over the year but not advancing from the immediately preceding quarter.
Eurostat’s first-quarter data also showed Portugal at 0.0 percent quarter-on-quarter and 2.3 percent year-on-year growth, matching the national figures reported by INE. The Bank of Portugal had projected no quarterly growth for the first quarter in its March economic bulletin, citing the early-year profile of activity. The confirmed data now provide the detailed national accounts behind Portugal’s stronger annual GDP rate and flat quarterly performance.