LISBON, March 25 (Xinhua) -- The Bank of Portugal has revised down its economic growth forecast for 2026 from 2.3 percent estimated in December to 1.8 percent, according to the central bank's bulletin published on Wednesday.
The revision was driven primarily by the economic fallout from the U.S. and Israeli military strikes against Iran since late February, which sent global energy prices surging, compounded by severe weather that battered Portugal in early 2026.
The inflation forecast was revised upward to 2.8 percent for 2026, against a December projection of 2.1 percent.
Nonetheless, the bank expected price pressures to ease gradually, projecting inflation rates of 2.3 percent in 2027 and 2.0 percent in 2028 as the effects of the energy shock dissipate.
A prolonged or intensified Middle East conflict could trigger further commodity price spikes, financial market volatility, and global supply chain disruptions, according to the bank. ■