Portugal Economy Shows Growth but Lags in AI Adoption, EU Report Warns

Portugal’s economy is showing steady signs of improvement in mid-2026, supported by gains in financial markets and rising industrial output.

Portugal’s economy is showing steady signs of improvement in mid-2026, supported by gains in financial markets and rising industrial output, even as concerns grow over its slow adoption of artificial intelligence compared with other European Union members.

The country’s benchmark stock index closed up 0.76%, driven largely by gains in Banco Comercial Português (BCP), reflecting renewed investor confidence in Portugal’s financial sector. At the same time, industrial activity is strengthening, with car production increasing by 3.3% in the first five months of 2026 compared with the same period last year, according to industry data.

Despite these encouraging indicators, Portugal continues to lag behind much of the EU in AI adoption. A European Commission report highlights that a relatively small share of Portuguese companies are integrating artificial intelligence and other advanced digital technologies into their operations, raising concerns about long-term competitiveness in an increasingly technology-driven global economy.

Analysts note that while traditional sectors such as manufacturing are performing well, the limited uptake of AI could restrict productivity growth and slow the development of higher-value digital industries. This gap may also make it harder for Portugal to fully benefit from broader EU-wide technological transformation efforts.

Policymakers and industry stakeholders are expected to face growing pressure to accelerate digital adoption through investment incentives, skills development, and stronger support for innovation ecosystems. Addressing this imbalance will be key to ensuring that Portugal remains competitive as artificial intelligence becomes more deeply embedded across European industry.