Bank of Portugal forecasts inflation of 3.1% this year, with a gradual decline towards around 2% in the following years, according to the Economic Bulletin.
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Inflation forecast by the Bank of Portugal
The Bank of Portugal (BdP) expects inflation to reach 3.1% this year, with a trend towards returning to values close to 2% in the following years, according to the Economic Bulletin. This development reflects an international context marked by instability in energy markets and the impact of rising commodity prices.
According to the analysis, the rise in inflation is largely linked to the increase in oil prices, influenced by the conflict in Iran, which has affected a significant part of global energy supply. This factor has had a direct impact on price developments and inflation dynamics in Portugal.
Difference compared to Government projections
Government projections point to a more moderate inflation rate, estimated at 2.5% in 2026, according to updated forecasts sent to European institutions. This difference reflects different economic scenarios and varying pressure on prices.
The Bank of Portugal highlights that the current context remains affected by external factors, particularly developments in energy markets and geopolitical tensions, which may prolong inflationary pressure in the short term.
Impact of ECB monetary policy
The Governor of the Bank of Portugal defended the European Central Bank (ECB), stressing that interest rate increases aimed to prevent an inflationary spiral. The decision was considered consensual in a context of broad-based price increases.
Inflation is not limited to energy, also extending to fertilisers and other goods and services, increasing the risk of spillover effects in the economy. The BdP considers monetary policy essential to stabilising inflation expectations.
Geopolitical conflict and economic impact
The impact of the Middle East conflict on the economy depends on its duration and evolution. A potential international agreement to reopen the Strait of Hormuz is seen as a positive factor, with the potential to ease pressure on energy markets. However, even with a swift resolution, a return to normality could take several months due to damage to energy infrastructure and the time required to fully resume production and distribution. The Bank of Portugal warns that economic effects will be gradual and dependent on geopolitical stability.
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