Eurozone economy edges higher, but Portugal races ahead in Q3

Flash estimate paints mixed picture for the single-currency area

Preliminary numbers from Eurostat indicate that gross domestic product across the 20-member eurozone expanded by 1.3 % compared with the same period a year ago and by 0.2 % versus the previous quarter. Although the quarterly pace remains modest, it came in slightly above the consensus of market economists, signalling that the currency union has avoided a stall despite weaker global trade and lingering geopolitical friction.

Portugal delivers one of the bloc’s brightest performances

Lisbon’s own statistics office (INE) released its rapid estimate on the same day, showing that Portuguese output climbed 2.4 % year-on-year and 0.8 % quarter-on-quarter. The annual gain is the fourth-strongest among the 15 EU countries that have so far published data, matching Sweden and trailing only Ireland (12.3 %), Spain (2.8 %) and the Czech Republic (2.7 %). On a quarterly basis, Portugal recorded the fastest growth inside the eurozone and was surpassed only by Sweden within the wider EU.

Domestic spending takes the wheel

INE attributes the upturn chiefly to buoyant household consumption. Shoppers loosened their purse strings thanks to a resilient labour market and moderating inflation, more than offsetting a slight slowdown in investment. Net trade still subtracted from growth, but the drag was less severe than in the spring as exports of goods and, notably, services—including tourism—accelerated.

How others fared

| Country | QoQ change Q3 2025 | YoY change Q3 2025 ||---------|-------------------|--------------------|| Ireland | –0.1 % | 12.3 % || Sweden* | 1.1 % | 2.4 % || Spain | 0.6 % | 2.8 % || Czechia | 0.7 % | 2.7 % || Portugal | 0.8 % | 2.4 % || Eurozone | 0.2 % | 1.3 % || Germany | 0.0 % | 0.4 % || France | 0.5 % | 0.9 % || Italy | 0.0 % | 0.6 % |*Sweden is outside the euro area but included for EU comparison.

Policy backdrop: ECB keeps rates steady, Brussels prepares new forecasts

The European Central Bank left its benchmark rate unchanged at 2 % for a third consecutive meeting, noting that inflation is hovering close to its medium-term goal yet risks remain tilted to the downside. In September the Bank’s staff trimmed their 2026 growth call to 1.0 %, and President Christine Lagarde stressed that any future easing would hinge on incoming data.

The European Commission will publish updated macro projections in November. Its spring outlook, compiled before the latest GDP release, foresaw expansion of 1.4 % in the eurozone next year. Officials have hinted that the stronger-than-expected third-quarter result could temper the extent of any downward revision, but they caution that trade tensions and higher energy costs still cloud the horizon.

What to watch next

More detailed national figures, including sectoral breakdowns and employment indicators, are scheduled for mid-November. For Portugal, analysts will examine whether the upbeat consumer trend can be sustained as household savings fall and borrowing costs stay elevated. Meanwhile, the government is banking on EU recovery funds to rekindle investment and keep the country near the top of the growth tables well into 2026.