Portugal reports 3.6% inflation in September as government limits energy relief

Inflation acceleration and fuel price pressures

Statistics Portugal released preliminary data showing that the national inflation rate rose to 3.6% in September 2026, climbing 0.3 percentage points from 3.3% in August. The agency attributed the acceleration primarily to escalating fuel costs affecting domestic consumers and transport networks. At the AICEP Forum held at the Palácio da Bolsa in Porto, Economy and Territorial Cohesion Minister Manuel Castro Almeida acknowledged that price growth is the primary strain on the national economy. Castro Almeida explained that rising energy costs stem from geopolitical instability and international conflicts affecting markets across Europe. He maintained that the government will focus interventions on strategic sectors, such as agriculture and commercial transport, to prevent wholesale fuel spikes from expanding into grocery prices.

Fiscal balance and budgetary limits

Prime Minister Luís Montenegro confirmed that the Portuguese government is making efforts to assist households and businesses while guarding against budgetary imbalances. Montenegro stressed that avoiding new public deficits remains essential to prevent future economic vulnerabilities. Speaking in Porto, Castro Almeida stated that the 2027 state budget will adhere strictly to balanced accounts, insisting that the state must not spend more than it collects in revenue.

Within the limits of budgetary balance, the government is always attentive to intervene in specific situations that seek to help prevent the increase in petrol prices at the pump from amplifying to supermarket shelves.

The economy minister also pointed to positive indicators, noting that public debt is decreasing, real wages are outpacing inflation, and exports and tourism continue to expand.

Structural investment and strategic reserves

The government's insistence on balanced accounts coincides with scrutiny from the Economic and Social Council during parliamentary hearings on the 2025 General State Account. Council adviser José António Cortez stated that successive administrations recorded a cumulative loss of 114 billion euros in unexecuted public investments between 2011 and 2025. Cortez emphasized that investment under-execution, particularly in railway networks, housing, and territorial cohesion, has functioned as an adjustment tool to balance national budgets. Former Economy Minister Pedro Reis, who served in Montenegro's cabinet between February 2024 and June 2025, commented that living costs could deteriorate further before improving. In response to energy security challenges, the Ministry of Environment and Energy confirmed plans to allocate 60 million euros to build strategic fuel storage facilities in Portugal, repatriating more than 130,000 tonnes of crude currently stored in France.

I understand the alert from my former colleagues, with a sense of consideration and awareness that this situation may still worsen before it improves.

European energy coordination in Dublin

At the informal European Energy Council in Dublin, European Commissioner for Energy Dan Jørgensen stated that the European Union faces no immediate risks to energy supply for the upcoming winter. Jørgensen acknowledged, however, that elevated market volatility and transit instability around the Strait of Hormuz continue to generate price pressures for households and commuters. He noted that the European Union has spent more than 100 billion euros in extra fossil fuel import costs since the start of the war without receiving additional energy volumes.

To mitigate costs, the European Commission is assessing proposals to lower mandatory gas storage targets to 80%, which could reduce short-term refilling expenses. Jørgensen urged member states to use budget flexibility for clean energy infrastructure, power grid modernization, and targeted transport fuel support to achieve long-term price reductions.