NECEP estimates point to GDP recovery in the second quarter – making up the decline at the beginning of the year. For 2025, they differ from the Government’s estimates.
Economists at Universidade Católica Portuguesa estimate that the Portuguese economy grew 0.7% in the second quarter compared to the first three months of the year, making up for the decline recorded at the start of the year.
According to the summary of Folha Trimestral de Cojuntura, released on Wednesday, July 9, by Núcleo de Estudos Económicos da Universidade Católica (NECEP), the Portuguese economy grew 0.7% quarter-on-quarter and 1.9% year-on-year, “offsetting the 0.5% quarter-on-quarter contraction in the previous quarter.”
Following NECEP’s calculations, the eurozone is expected to have grown 0.4% in the second quarter, slowing down compared to the previous quarter (when it grew 0.6%). If the estimates are confirmed, Portugal will have grown more than the average for eurozone countries.
NECEP also revised downwards its estimate for the Portuguese GDP growth for the whole year, expecting it to advance 0.3 percentage points less. Now, the forecast is for the economy to grow 1.7%, “following the first quarter’s decline, which was driven by a private consumption deflator much higher than inflation,” economists explain.
Thus, NECEP is less optimistic than the government, which continues to point to growth of 2.4% this year, standing virtually alone in its estimate.
For 2026 and 2027, NECEP maintains growth scenarios of 2% and 2.2%, respectively.
However, the authors warn that “the forecast intervals remain high” due to “uncertainty surrounding the evolution of the world economy”, that arising from the potential impact of tariffs introduced and announced by the US administration in early April.
Economists also warn of some risks in Portugal: “Attention is now focused on changes to income tax and migration policies, which could have consequences not only for the budget but also for economic activity and prices”, they stress.
Inflation above 2%.
Regarding prices, NECEP points out that inflation rose above 2% again in June (more precisely to 2.4% year-on-year), even though the chain variation was only 0.1%.
Therefore, Católica’s economists believe that the disinflation process is still ongoing but say that “it is expected that overall price growth will remain above the 2% target in 2025, both in Portugal and in the Eurozone.”
Católica is thus more pessimistic than the Bank of Portugal and the ECB, which expect inflation to fall below the reference target in booth Portugal and the Eurozone this year.