Portugal economy stalls in Q1, among EU’s weakest

Portugal’s economy stalled in the first quarter of 2026, posting one of the weakest quarter-on-quarter performances in the European Union, according to Eurostat data. The flat reading points to a loss of momentum at the start of the year, even though Portugal still outperformed the euro zone and EU averages on annual growth.

Eurostat’s flash estimate showed Portugal’s GDP was unchanged from the previous quarter, after a growth of 0.9% in the final quarter of 2025. Among EU countries with data available, only Ireland (-2.0%), Lithuania (-0.4%), Sweden (-0.2%) and Romania (-0.2%) performed worse on a quarterly basis, while France also recorded zero growth.

The slowdown came amid weaker activity across Europe. GDP in the 20-country euro area rose 0.1% quarter on quarter in the first three months of 2026, down from 0.2% in the previous quarter, while the EU grew 0.2%. Finland and Hungary led the quarterly rankings with 0.9% growth, followed by Bulgaria at 0.7%, and Spain and Estonia at 0.6%.

On an annual basis, however, Portugal remained one of the stronger performers in Europe. GDP grew 2.3% from the first quarter of 2025, above the euro area average of 0.8% and the EU’s 1.0%. Only Cyprus (3.0%), Bulgaria (2.9%) and Spain (2.7%) recorded faster year-on-year growth among the countries listed in the Eurostat release.

Eurostat also said employment growth slowed in the first quarter, with the number of people in work rising 0.1% in both the euro area and the EU, below the 0.2% increase seen in the previous quarter. The figures suggest the broader European slowdown is starting to feed through to labour market trends as well.

Originally published at Eco.pt