INE's Q1 2026 Flash Estimate Stops Quarterly Growth at Zero as April Inflation Jumps to 3.4% — Storm Cluster and Iran Conflict Knock 0.2pp Off GDP, Energy Prices Drive Headline CPI Up 0.7pp in a Month

Statistics Portugal (INE) released two of the most-watched indicators in the national accounts and price calendar on Thursday morning. The flash estimate for first-quarter Gross Domestic Product registers zero growth in chain terms, a sharp deceleration from the 0.9% quarter-on-quarter pace recorded in Q4 2025. The year-on-year reading lifts to 2.3%, up from 1.9% in the previous quarter. The April flash estimate for the Consumer Price Index has the headline annual rate climbing 0.7 percentage points to 3.4%.

The Stalling Quarter

INE attributes the loss of quarterly momentum to two simultaneous shocks. The cluster of winter storms that battered the mainland between January and March disrupted construction sites, agricultural campaigns and several industrial supply chains. Banco de Portugal's spring projection already estimated the storm impact at roughly 0.2 percentage points of Q1 GDP. Layered on top is the onset of the Iran conflict, which lifted Brent prices and dampened both consumer and business confidence indicators in March and April.

Internal demand still contributed positively to the quarter, with INE flagging an acceleration in investment and a slowdown in private consumption. The drag came from external demand: imports rebounded faster than exports as energy and capital-goods purchases recovered, widening the trade gap captured separately in INE's goods trade release earlier this week.

April Prices: Fuel Does the Heavy Lifting

The CPI flash estimate puts the annual rate at 3.4% in April, up from 2.7% in March and 2.1% in February. The energy index alone is now 11.7% above April 2025 levels, against a March reading of 5.7% — the single biggest contributor to the headline acceleration. Unprocessed food adds another 7.5%, slightly higher than the 6.4% recorded in March. Core inflation, which strips out energy and unprocessed food, climbs more modestly to 2.2%, up 0.2 percentage points on the month.

The monthly rate is 1.4%, lower than the 2.0% recorded in March but well above the 0.7% logged in April 2025. Final April figures land on 13 May.

What This Means for Expats

• Mortgage cost relief is paused. Reaccelerating inflation removes the pressure on the ECB to cut faster, which keeps Euribor anchored. Households on tracker mortgages should not expect material relief over the spring resets.
• Fuel and travel budgets need adjustment. An 11.7% annual rise in the energy index translates directly into petrol-pump prices and air-fare surcharges. Planning summer travel on 2025-level fuel assumptions will under-budget by roughly a tenth.
• Real wage growth is squeezed. With the headline at 3.4% and most negotiated raises in the 2.5–3% band, real take-home is going backwards in April. Employees with annual reviews due in Q2 should anchor expectations to CPI, not the policy-target 2%.
• Investment is still expanding. The internal-demand breakdown shows businesses kept committing capital despite the storm shock. Sectors tied to PRR-funded projects remain a relatively reliable hiring channel.
• Watch the May CPI confirmation. Energy spikes can normalise quickly if Brent recedes. The 13 May final read will decide whether April was a one-off pulse or the start of a stickier inflation phase.