OECD Economic Survey calls on Portugal to improve public spending efficiency, skills and housing policy while forecasting 2.2% GDP growth in 2026

The OECD published its latest Economic Survey of Portugal, projecting GDP growth of 2.2% in 2026 and 1.8% in 2027, supported by robust domestic demand, with inflation moderating from 2.2% in 2025 to 2.0% in 2027. The Survey argues that further structural reforms are needed to secure stronger and sustainable improvements in living standards. Public debt is expected to keep declining from 93.6% of GDP in 2024 to 84.9% in 2027, with improved public spending efficiency highlighted as central to lowering debt while accommodating investment needs and ageing-related spending pressures. The Survey points to a shrinking working-age population and scope to lift productivity and employment, recommending support for older workers through targeted reskilling, additional counselling and more flexible work arrangements, alongside a gradual tightening of early retirement options. It also calls for reducing tax expenditures, including value-added tax exemptions, and cutting red tape, notably in services; addressing housing affordability by easing supply constraints linked to construction costs and permitting; shifting part of the tax burden from transaction taxes toward recurrent property taxes and strengthening taxation of underused housing; and scaling social housing with more targeted support for low-income groups. On climate, it recommends harmonising and strengthening carbon prices, investing in public transport and charging infrastructure, broadening private insurance coverage against climate risks, and improving coordination and capacity across municipalities.