Tag Archives: Inflation

INE Sets Rent Update for 2026 at 2.24%

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The 1.0224 coefficient reflects a moderate increase in line with inflation, balancing the interests of landlords and tenants.

The National Statistics Institute (INE) has announced that the rent update coefficient for 2026 will be 1.0224, corresponding to an increase of 2.24%. This figure, calculated based on the average variation of the consumer price index (excluding housing) over the past 12 months, establishes the maximum limit for updating residential and commercial rents next year.

The decision represents a moderate rise compared to previous years, reflecting the stabilization of inflation in Portugal. For tenants, it means a contained increase in housing costs after periods of strong pressure on household budgets. For landlords, the update helps preserve the real value of rents amid rising maintenance expenses and property-related taxes.

The coefficient will be published in the Official Gazette, becoming binding as of January 2026. Experts note that this update aligns with the broader trend of economic moderation and could contribute to greater predictability in the rental market. However, they also caution that balancing tenant protection with incentives for real estate investment will remain one of the main challenges for Portugal’s housing policy.

ECB keeps interest rates steady but signals possible cuts in 2025

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European Central Bank’s decision reflects caution regarding inflation trends but signals openness to reduce borrowing costs next year.

The European Central Bank (ECB) has decided to keep its benchmark interest rates unchanged, opting for a cautious stance in light of the eurozone’s economic outlook. Despite this decision, the institution left the door open for potential cuts in 2025, should inflation continue to converge sustainably toward the 2% target.

According to ECB President Christine Lagarde, the priority remains ensuring price stability. However, it was acknowledged that current economic conditions are weighing on consumption and investment, particularly in countries like Portugal, where households and businesses still face the burden of high financing costs.

Keeping rates steady means that, for now, housing and consumer loans will continue to carry high costs. Nevertheless, the prospect of future cuts brings optimism to investors and economic agents, who anticipate a gradual easing of financial pressures.

If reductions do materialize in 2025, Portugal could benefit from stronger domestic economic activity, with positive effects on business investment and the real estate market. Still, experts stress that the adjustment must be balanced to avoid undermining the recent progress made in fighting inflation.

SNS Registers a Hole of €465 Million Until May

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Official data reveal that the deficit of the National Health Service (SNS) almost doubled until May compared to the same period in 2024, reaching a hole of €465 million, reflecting a worsening of €312.4 million compared to the previous year. This result is mainly due to the increase in personnel costs (growth of 13.6%) and the pressure exerted by inflation on medical supplies.

The growth in spending on human resources, partly due to salary updates and partly due to extraordinary hiring in a post-pandemic context, is the main factor in the budgetary deterioration of the SUS. At the same time, operating costs have soared due to the rise in the prices of energy, services and hospital maintenance.

The situation is a cause for concern for healthcare professionals and hospital managers, who warn of the risk of compromising the quality and effectiveness of the services provided. Without additional containment measures, public funding may be insufficient to cover emerging needs, especially in critical specialties.

The government has already admitted to reviewing its forecasts for the public deficit and highlights the urgent need to promote reforms in the healthcare sector, including better financial planning, spending control and investment in digitalization and hospital management.

Fórum for Competitiveness predicts GDP growth between 1.7% and 1.9% in 2024

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The Fórum for Competitiveness is more optimistic about economic growth in 2024, as indicated in the third-quarter 2024 “Business Perspectives” report. The Fórum has revised its projections upward, now anticipating GDP growth between 1.7% and 1.9% for 2024, compared to its previous forecast of 1.5% to 1.9%. For 2025, GDP growth is expected to be between 1.8% and 2.2%, aligning with the Government’s 2025 State Budget forecasts, which estimate 1.8% growth in 2024 and 2.1% in 2025.

However, the Fórum highlights risks that could impact these projections. Nationally, there is concern about “high political uncertainty,” with the possibility that the 2025 budget may not be approved, potentially leading to early legislative elections. Such a scenario would be detrimental to economic performance, particularly in the investment sector.

Internationally, the economic situation is improving, though geopolitical risks, especially in the Middle East, are on the rise, with fears of an escalation in the conflict between Hamas and Israel.

Regarding inflation, the Fórum projects a slowdown, from 4.3% in 2023 to a rate between 2.3% and 2.4% in 2024, and between 1.8% and 2.2% in 2025.

Source: https://www.noticiasaominuto.com