But when you look at the Portuguese economy with some detachment and data in hand, the picture that emerges is much more solid than the noise suggests. The most recent work of the economic cycles committee of the Francisco Manuel dos Santos Foundation confirms this: Portugal enters 2026 with sustained growth, high business confidence and one of the longest periods of economic expansion in its recent history.
The committee, led by Ricardo Reis and composed of eight of the country’s leading economists, analysed hundreds of indicators and reached a clear conclusion: the Portuguese economy will continue to grow in 2026, extending a sequence of 22 consecutive quarters of expansion that began in 2020. In an international context marked by persistent inflation, trade tensions and geopolitical uncertainty, this performance is not trivial.
One of the key factors of this resilience has been the massive application of funds from the Recovery and Resilience Plan. The so-called “European bazooka” enters its last year of execution in 2026, which means high levels of public investment, boosting the economy and directly stimulating activity in structuring sectors such as construction, energy, infrastructure, technology and public services.
Unlike previous cycles, growth is not based only on consumption or tourism. While tourism continues to show impressive momentum, with employment growth of 10 percent, services in general have sustained economic activity and offset the drop in exports of goods caused by the effects of U.S. tariffs. Interestingly, the committee points out that the Portuguese economy withstood this external shock “surprisingly well”.
Another important sign for 2026 comes from private investment. The increase in the number of building permits, the improvement in the sector’s confidence indices and the positive evolution of employment, especially through open-ended contracts and self-employment, point to a healthier and more structural investment cycle.
There are risks, of course. Geopolitical instability, the still high dependence on tourism, the difficulties of the German economy and trade tensions between Europe and China are factors that cannot be ignored. But the most relevant thing is that these risks today find a Portuguese economy much more prepared, diversified and institutionally stable than in previous crises.
Even the most cautious scenarios do not point to a depression in 2026. The risk of recession exists, in the order of 30% to 40%, but the economists themselves stress that the most likely scenario is that of slower growth, not a deep fall.
In short, Portugal enters 2026 with solid fundamentals, active investment, business confidence and a more mature economic base. In a world in transition, this is now a huge competitive advantage.
