Portugal’s economy is beating forecasts. Why doesn’t it feel like it?

The IMF has better news about Portugal’s economy than it did in June. It’s Wednesday, 14 October. Twenty-eight degrees. Air quality: 33 (Good). Here’s what you need to know.

🗞️ TOP STORY

THE IMF SAYS PORTUGAL’S ECONOMY IS DOING BETTER THAN IT THOUGHT

The International Monetary Fund now expects Portugal’s economy to grow by 2.1% this year and 1.9% next year, a sharp upgrade on the 1.7% and 1.6% it was forecasting as recently as June. The new figures came out yesterday in the IMF’s World Economic Outlook, its twice-yearly report on the global economy.

The IMF is still more cautious than the government, whose 2027 budget assumes growth of 2.3% this year and 2.1% next. But the direction is the same, and the IMF expects unemployment to stay steady at around 5.9% in both years.

Business figures from the Bank of Portugal tell a similar story. The number of companies grew by 3.3% last year to 558,722, their combined turnover rose 4.5% to €577.46 billion, and they now employ almost 3.78 million people, up 2.2%. Construction led the way, with turnover up 11.5%. Small businesses dominate: almost 89% of firms are micro-businesses, though they employ just over a quarter of the workforce, while large companies make up only 0.3% of firms but generate nearly 43% of turnover. Over the longer run, the number of companies has grown by more than half since 2006.

The less cheerful figure is inflation. The IMF expects prices to rise by 3.2% this year and 3% next year, while the government’s budget assumes 2.9% and 2.3%. The difference matters. Next year’s 3.88% rise in income tax bands and 2.3% pay rise for public-sector workers sit alongside the government’s forecast of prices calming down. If inflation stays close to 3%, those rises go less far. The minimum wage, rising 5.4% to €970, would stay ahead of either forecast.

For anyone working in Portugal, a growing economy and steady unemployment rate are good news. But if the IMF is right about prices, the cost of living will keep rising faster than the government expects. That’s the pressure thousands marched over on Saturday.

Bottom line: the economy is beating forecasts, but if the IMF is right about inflation, plenty of households won’t feel the difference yet.

⚡ QUICK HITS

Portugal was among the countries targeted in a cyberattack on European supermarkets’ fridges, but no incidents have been reported here. Overnight on Sunday, hackers took remote control of refrigeration systems in French supermarkets, pushing up temperatures in fridges and freezers. Around 150 Intermarché stores, 80 Carrefour supermarkets and about 25 Monoprix outlets had to throw away fresh and frozen food. A cybersecurity expert from the firm Sekoia told CNN Portugal that systems in Portugal, Spain, Poland, Germany and Belgium were also targeted. The attack reportedly exploited outdated software in internet-connected equipment, and French authorities are investigating.

Ryanair passengers with checked bags will need to drop them off earlier from 10 November. Bag drop will close 60 minutes before departure instead of 40, which Ryanair says will give passengers more time for security and passport control. The airline is also rolling out self-service bag-drop kiosks, which it says will be in more than 95% of its airports this month. Separately, it has announced three new routes to Porto for summer 2027, from Bournemouth, Exeter and Friedrichshafen in Germany, already on sale.

Shamonda virus, which affects cattle and sheep, has been detected in Portugal, but vets say there’s no evidence it can spread to people. The virus is carried by tiny biting midges. In cattle it can cause fever and lower milk yields, but the bigger worry is for pregnant animals, where infection is linked to miscarriages and serious birth defects. Portugal’s Order of Veterinarians, the vets’ professional body, issued an alert at the request of DGAV, the food and veterinary authority, which is monitoring the situation. Until recently the virus was mainly found in Africa and Japan, but this year it has been confirmed in countries including Switzerland, France, Germany, Austria and the Netherlands. There’s no vaccine or treatment, so farmers are focusing on protecting animals from the midges.

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🍽️ SPOT OF THE DAY

LOST IN (PRÍNCIPE REAL)

Walk too quickly along Rua Dom Pedro V and you’ll miss the entrance to Lost In, which is half the fun of finding it. Behind it is a garden terrace that looks out over Lisbon, dressed in Indian-inspired colours, with fabrics, colourful hats and soft lighting. Sunset is when it’s at its best.

The menu mixes Portuguese and Indian influences. Bread comes with papadum, flavoured butter and tapenade, and there are sharing plates like beef tenderloin pica-pau with mustard sauce and pickles, and pulled-pork croquettes, alongside curries.

Worth knowing before you go: reviews are split. The view gets almost universal praise, but some diners find the food underwhelming for the price, with small portions, and service can be slow when it’s busy. Treat it as a place for drinks and the view first, and dinner second. From Monday to Wednesday it opens at 4pm, and from Thursday to Sunday at 12:30pm, staying open until midnight every day. The terrace is heated, staff hand out blankets when the evenings cool down, and you can book by phone or email.

→ Find them here ←

Insider tip: arrive for the weekday happy hour, from 4pm to 6pm, when cocktails and draft beer are half price, then stay for the sunset, at around 7pm this time of year.

📅 WHAT’S ON

See you tomorrow morning.

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