On quarterly basis, the country's economy grew by 1 percent in the first quarter, according to the INE.
The International Monetary Fund (IMF) raised its projections for the Portuguese economic growth from the previous 1.1 percent to 1.7 percent this year, slightly below the government forecast of 1.8 percent.
Before starting a visit to a horticultural company in Odemira, some 200 km south of capital Lisbon on Monday, Portuguese Prime Minister Antonio Costa said that the INE figure shows that "the Portuguese confidence was not unfounded" and that the combination of policies "is adequate."
"What the data has consistently demonstrated since mid-2006 is that the cycle of economic downturn has been reversed and has had a sustained growth," he said.
Portugal's Socialist government, which came to power in November 2015, has been reversing austerity measures imposed by the previous administration following a 78-billion-euro (84.76 billion U.S. dollars) bailout in 2011.