When Luís Montenegro addressed Portugal's parliament on 8 September, he made a bold claim: his country had the best economic performance and the highest employment growth rate in Europe. The prime minister's remarks came during a debate on a motion of no confidence tabled by the far-right Chega party, which he survived with support from other opposition parties.
Montenegro's assertion, made in the context of a politically fragile minority government, has prompted a closer look at the latest Eurostat figures. The data tells a more nuanced story: Portugal is indeed a standout on employment, but its GDP growth, while respectable, is not the best in the EU.
GDP growth: Ireland's outlier surge
According to Eurostat, the EU's GDP grew by 0.7% in the second quarter of 2026 compared with the previous quarter. Ireland was the clear leader, with a remarkable 10.2% jump. However, economists caution that this figure is heavily distorted by the activities of multinational corporations, particularly in technology and pharmaceuticals, making it an unreliable measure of the underlying Irish economy.
Slovenia and Lithuania followed with 1.8% and 1.7% growth, respectively. Portugal, along with Cyprus, recorded a 0.8% rise, placing it joint seventh among the 27 member states. Austria was the only country to see a contraction, with GDP falling by 0.1%.
So while Portugal is performing well, it is not the best performer in the bloc. The prime minister's claim of being number one on economic growth does not hold up against the official data.
Employment: Portugal takes the top spot
On employment, however, Montenegro's claim is accurate. Eurostat data shows that employment in the EU rose by 0.1% in the second quarter of 2026, with around 221.4 million people in work. Portugal led the pack with a 1% increase, followed by the Czech Republic and Malta, both at 0.9%.
This strong employment performance is a genuine bright spot for Portugal, which has faced political instability with three elections in three years. The country's labour market resilience is notable, even as other economic indicators lag behind.
The broader European picture remains mixed. While some economies are growing robustly, others, like Austria, are struggling. The divergence highlights the uneven recovery across the continent, with southern and eastern European countries often outperforming their western neighbours on employment, while larger economies like Germany and France face structural challenges. For more on regional disparities, see our analysis of France's economic slowdown.
For Portugal, the government's focus on job creation is paying off, but the country still faces significant hurdles, including high public debt and the need for sustained investment. The prime minister's optimistic framing may be politically motivated, but the employment figures give him some justification.
As the EU navigates a period of slow growth and geopolitical uncertainty, the performance of individual member states will remain under scrutiny. Portugal's employment success is a positive story, but it is not the whole picture. The country's GDP growth, while solid, is far from the top of the table, and the gap between its labour market and economic output underscores the complexity of measuring success in a diverse union.
