Good morning, Lisbon. It's Tuesday, March 31, and we're looking at 19°C with sunshine and light clouds. Portugal play the USA tonight in Atlanta, the central bank just delivered a reality check, and Easter is four days away. Let's get into it.
🌬️ AIR QUALITY: 23 (Good). Another clean spring morning.
🗞️ TOP STORY
THE CENTRAL BANK JUST CUT ITS GROWTH FORECAST. HERE'S WHY IT MATTERS.
The Banco de Portugal published its March Economic Bulletin this week, and the headline number is a downgrade. The Portuguese economy is now projected to grow 1.8% in 2026, down half a percentage point from the December forecast. Inflation, meanwhile, is expected to hit 2.8% this year, up from earlier projections.
The culprit is familiar: the Middle East. The conflict that's been pushing diesel past €2 and gas prices up 85% is now feeding directly into the central bank's models. Higher energy costs mean higher production costs for businesses, higher prices at the supermarket for everyone, and tighter financing conditions as the European Central Bank responds. The Banco de Portugal is explicit: a sharper or longer oil price spike would mean even less growth and even more inflation than projected.
There are buffers. The labour market remains strong, with unemployment at historically low levels. The government's expansionary fiscal policy and Recovery and Resilience Plan spending are propping up domestic demand. And Portugal is still expected to grow faster than the euro area average, though that gap is narrowing.
But the bulletin also flags two risks that hit closer to home. First, the extreme weather events at the start of 2026 (remember the storms?) knocked activity in the first quarter. Second, migration flows are expected to slow, which means job creation will decelerate. For a country that's been adding workers at pace, that's a structural shift.
For expats, the practical takeaway is this: the cost of living in Portugal is rising, and it's not just fuel. The central bank expects the energy shock to gradually feed through to food, services, and goods over the coming months. Inflation should ease back toward 2% by 2028, but 2026 is going to be the expensive year.
Bottom line: Portugal's economy is still growing, still outperforming most of Europe, but the Middle East is taxing everyone's wallet. The era of "cheap Lisbon" is getting harder to defend.
⚡ QUICK HITS
Portugal vs USA tonight. The seleção play the United States at Mercedes-Benz Stadium in Atlanta. Kick-off is 7pm local time, which is midnight Lisbon time. Still no Ronaldo. This is Portugal's last friendly before the World Cup squad starts to crystallise, so Martinez will be watching closely.
Easter tourism surge. Portugal is seeing a record influx of spring visitors, with hotel occupancy in Northern Portugal at 80-85% and the Algarve accounting for 26% of all overnight stays nationally. Tourism arrivals are up 3.8% year on year, with revenue hitting €276.8 million already in 2026. The country now ranks 7th on the Global Peace Index, and international media are calling it a "safe haven" destination as travellers avoid the Middle East.
Airport queues update. The EES biometric system reactivated last Monday is still causing delays. If you're flying this week ahead of Easter, arrive early. EU passport holders can use e-gates; non-EU nationals are bearing the brunt.
Last working day before Easter wind-down. Government offices, AIMA, Financas, notaries, and banks are open today through Thursday. Good Friday (April 3) is a public holiday. If you have anything pending, this is your window.
🍽️ SPOT OF THE DAY
There's not much of sign outside and no website worth mentioning. You show up, put your name down, wait on the street with a glass of wine, and when a table opens in the narrow, shelf-lined room, you sit down and eat whatever chef Andre Magalhaes decided to cook that morning. That's Taberna da Rua das Flores.
The menu is handwritten on a blackboard and changes daily based on what's in season. Lunch leans traditional: meia-desfeita (salt cod salad with chickpeas), croquettes, petiscos. Dinner is where the kitchen stretches: scallops in unexpected sauces, pork belly that falls apart, ceviche, grilled fish, and whatever else the producers near Lisbon brought in. The portions are tapas-sized and meant for sharing. Order four or five dishes for two people and let the staff guide you.
The wine list is short, Portuguese, and well-priced. The room is tiny, loud, and has the energy of a place that knows it's good but doesn't need to prove it.
Rua das Flores 103, Chiado. Open daily, noon to midnight. Expect to pay €30-45 per person with wine. Get there early for dinner to avoid the longest waits, ideally by 6pm.
Insider tip: At lunch, the iscas com elas (liver with potatoes) is a Lisbon classic done properly. At dinner, trust the staff's recommendations over the blackboard. They know what's singing that night.
📅 WHAT'S ON THIS WEEK
Portugal vs USA (Tonight) Mercedes-Benz Stadium, Atlanta. Midnight Lisbon time.
Good Friday (Fri April 3) Public holiday. Banks, government offices, most shops closed.
Easter Sunday (Sun April 5) Public holiday.
Tame Impala (Sun April 5) MEO Arena. Easter Sunday show.
Rosalia (Wed April 8) MEO Arena. Tickets still available.
📜 ON THIS DAY
March 31, 1889. The Eiffel Tower was officially completed in Paris after two years of construction, just in time for the 1889 World's Fair. At 300 metres, it was the tallest structure in the world, a record it held for 41 years. Parisians hated it. A petition signed by prominent artists and intellectuals called it "a disgrace to the city," a "metal asparagus," and demanded it be torn down. Guy de Maupassant reportedly ate lunch at the tower's restaurant every day because it was the only place in Paris where he couldn't see it. It was originally meant to be dismantled after 20 years but was saved because it turned out to be useful as a radio transmission tower. Today it's the most visited paid monument on earth. The lesson: the thing your city complains about most loudly is probably the thing that ends up defining it. Lisbon's tram 28, anyone?
See you tomorrow morning.
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