Prime Minister describes Portugal's economic moment as a "two-faced reality"
Portugal's government is navigating two opposing economic currents at once, Prime Minister Luís Montenegro told reporters in New York, where he is attending the 81st United Nations General Assembly. One face shows a country winning international praise for its fiscal discipline and growth; the other shows families and businesses absorbing fuel price spikes that Montenegro called "absurd and senseless."
The remarks came during the second day of his three-day official visit to the United States, which began with a half-hour meeting with UN Secretary-General António Guterres, the former Portuguese prime minister who ends his term in December.
International recognition against domestic strain
Montenegro said there was no contradiction between the optimism he has projected in US meetings and the "hard moment" he acknowledged in a recent national address. Instead, he described two concurrent realities moving in opposite directions.
"Portugal is a country with very high international recognition today. And it is not by accident," he told journalists, according to Notícias ao Minuto.
During a visit to the New York Stock Exchange on Tuesday, the exchange's president cited Portugal as "an example in the European Union" for combining economic growth with a balanced budget, lower taxes, and efforts to cut red tape. Montenegro said wage increases, tax relief, and support for companies to retain skilled workers were generating "confidence that is not rhetorical, it is sustained."
Government projections place GDP growth around 2.1% to 2.5% for 2026, above the European average, with the Prime Minister assuring US audiences of a fourth consecutive budget surplus this year.
Fuel prices hit Portuguese households and firms
Yet the Prime Minister acknowledged what he called the "other plan, which is also real": the impact of rising fuel costs driven by geopolitical tension, which he linked to the conflict between the United States and Iran.
"We are suffering, in our own skin, all of us, each Portuguese citizen, each Portuguese family, each Portuguese company, each Portuguese institution and organization, an increase that has no justification in the cost of fuels," he said.
Statistics bear out the strain. In the week of 21 to 27 September, simple diesel reached €2.210 per litre, a yearly high, while gasoline 95 hit €2.107 per litre. The National Statistics Institute (Instituto Nacional de Estatística) has linked the fuel price surge to inflation's acceleration to 3.3% in August, the highest rate since September 2023.
Business associations warn the increases are pushing logistics and transport costs higher across the economy, squeezing small firms' margins and rippling through food supply chains. The government has extended fuel tax discounts worth more than €700 million in total support, including IRS reductions and an extraordinary pension supplement.
A push for energy autonomy
At a high-level UN event on Climate Action and Just Transition, Montenegro positioned Portugal as being "on the front line of the energy transition". He pledged that the country will double its installed renewable energy capacity by 2030 and reach two gigawatts of offshore wind capacity by the same year.
More than 75% of Portugal's electricity already comes from renewable sources, he noted. Targets include a 55% reduction in greenhouse gas emissions by 2030 and efforts to reach carbon neutrality ahead of the 2050 goal.
The Prime Minister also framed renewable investment as a path to strategic autonomy. At a moment when "we are all being affected by this absurd and senseless reality of paying more for oil-derived fuels," the ability to be more self-reliant and offer cleaner, cheaper energy "is a common goal," he said.
Portugal has experienced this directly, he added, pointing to growing forest fires, storms, and flash floods as evidence of climate emergencies.
Debt-for-climate swaps and ocean protection
Montenegro announced that Portugal will contribute €75 million to the European Alliance "Ocean Eye" project, aimed at strengthening ocean protection. The contribution includes both financial donations and in-kind support.
He also highlighted Portugal's mechanism for converting debt into climate investment, now being deployed in Cape Verde and São Tomé and Príncipe. In Cape Verde, the agreement redirects up to €42.5 million by 2030, financing projects such as expanding a solar photovoltaic plant on Santiago island. In São Tomé and Príncipe, €3.5 million will support climate resilience and clean energy projects.
Bilateral meetings with the Presidents of Angola, João Lourenço, and Timor-Leste, José Ramos Horta, also featured on Wednesday's agenda.
On Thursday, Montenegro is scheduled to address the high-level session of the UN General Assembly on the final day of his US visit.
