In its October Economic Bulletin, the central bank projects that inflation will rise to 3.1% in 2026 and then decline in subsequent years to levels close to price stability (2.4% in 2027 and 2.0% in 2028), “benefiting from the fading effects of the energy shock and the moderation of labour costs.”

“This trend is in line with projections for the euro area and with the figures released in the June Economic Bulletin,” the BdP adds.

Regarding the labour market, the institution believes the situation “will remain favourable” but anticipates “less pronounced employment growth, against a backdrop of lower migration flows than those observed in 2021–2024.”

Consequently, employment is estimated to grow by 1.7% in 2026, 0.7% in 2027, and 0.3% in 2028, while the unemployment rate is expected to stand at 5.6%.

Set The Portugal News as your preferred source for news on Google

GoogleAdd as a preferred source on Google