Portugal: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Portugal

The 2026 Article IV Consultation discusses that Portugal’s economic performance has been strong. In an uncertain global environment, priorities should be to entrench the remarkable gains achieved in recent years in strengthening economic and financial resilience, while accelerating convergence toward higher living standards. Fiscal policy should continue focusing on debt reduction while reorienting public spending toward higher investment. Efforts should rely on tax reform, improved efficiency of spending, and measures to contain spending pressures from aging. Continued strengthening of the financial policy framework will help preserve stability and increase access to finance. Reinforcing the macroprudential policy toolkit, closely monitoring the real estate market, and fostering the growth of the Nonbank Financial Institution sector are key. Higher medium-term growth requires productivity-enhancing reforms, including measures to support innovation and firm growth, streamlined bureaucracy, product and labor market reforms, and continued improvement in education. Working with its EU partners, Portugal has much to gain from a deeper common market, the savings and investment union, and greater energy market integration.