Economy Of Portugal

The economy of Portugal was ranked 36th in the World Competitiveness Ranking for 2024, as assessed by the Swiss institute IMD, reflecting the country’s relative position in global economic performance and competitiveness. This ranking takes into account various factors such as economic performance, government efficiency, business efficiency, and infrastructure, highlighting Portugal’s standing among other nations in terms of its ability to foster a conducive environment for economic growth and development. In 2020, the European Union (EU) played a pivotal role in Portugal’s international trade relations, serving as the primary partner for both exports and imports. Specifically, 71.4% of Portuguese exports were directed to EU member states, while 74.6% of imports originated from within the EU. This significant trade interdependence underscores Portugal’s integration within the European single market and its reliance on intra-EU commerce for economic sustenance. The close trade ties with the EU also reflect Portugal’s strategic positioning within the bloc and its participation in the broader European economic framework. Portugal’s official currency is the euro (€), which the country adopted upon joining the Eurozone at its inception. The introduction of the euro marked a critical step in Portugal’s economic integration with the rest of Europe, facilitating trade, investment, and monetary stability. The Banco de Portugal serves as the nation’s central bank and is an integral part of the European System of Central Banks (ESCB), which coordinates monetary policy across the Eurozone. Through its membership in the ESCB, Banco de Portugal contributes to the formulation and implementation of the European Central Bank’s policies, ensuring the stability of the euro and the smooth functioning of the financial system within Portugal. The major stock exchange in Portugal is Euronext Lisbon, which operates as part of the pan-European Euronext group. Euronext Lisbon provides a platform for the trading of equities, bonds, and other financial instruments, playing a crucial role in mobilizing capital and facilitating investment in the Portuguese economy. The exchange supports a range of companies, from established multinational corporations to emerging enterprises, thereby contributing to the country’s financial market development and economic diversification. Among the member countries of the Organisation for Economic Co-operation and Development (OECD), Portugal is recognized for maintaining a highly efficient and robust social security system. Social expenditure in Portugal accounts for approximately 24.6% of the nation’s gross domestic product (GDP), reflecting a substantial commitment to social welfare programs, including healthcare, pensions, unemployment benefits, and family support. This level of social spending underscores Portugal’s focus on social protection and the provision of safety nets aimed at reducing poverty and inequality, as well as promoting social cohesion. The International Monetary Fund (IMF) projected a GDP growth rate of 2% for Portugal in the year 2025, signaling a positive outlook for the country’s economic expansion. This forecast reflects expectations of continued recovery and development following previous periods of economic challenges. The growth projection is indicative of Portugal’s capacity to harness domestic and external factors, including investment, consumption, and trade, to sustain its economic momentum. Portugal’s economic growth in recent years has been accompanied by a steady decline in unemployment rates. From a high of 13.9% at the end of 2014, unemployment fell to 6.3% by the first quarter of 2019, demonstrating significant improvements in the labor market. This downward trend in unemployment was driven by economic recovery, structural reforms, and increased job creation across various sectors. According to Statistics Portugal, the unemployment rate stood at 6.4% in January 2025, indicating a stabilization of employment levels and continued efforts to maintain labor market resilience. In the third quarter of 2024, Portugal ranked third in Europe for the highest GDP growth compared to the same period in 2023, achieving a growth rate of 1.9%. This performance surpassed the average growth rates of both the European Union and the Eurozone, which stood at 0.9% for the same period. Portugal’s robust growth during this quarter highlighted its economic dynamism and ability to outperform many of its European counterparts, reflecting effective economic policies and favorable external conditions. In 2023, Portugal’s fiscal management resulted in a budget surplus that exceeded forecasts by 1 billion euros, culminating in a historic surplus of 1.2% of GDP. This surplus amounted to 2,191 million euros, surpassing the expected target of 0.8%. The achievement of this fiscal surplus marked a significant milestone in Portugal’s public finance management, reflecting prudent budgetary discipline, improved revenue collection, and controlled public spending. Such fiscal strength contributed to enhancing investor confidence and the country’s creditworthiness. These positive economic indicators represented a reversal from the negative trends that had characterized the aftermath of the 2008 global financial crisis. The crisis had precipitated economic contraction in Portugal during 2011, 2012, and 2013, accompanied by a peak unemployment rate of 17.7% in early 2013. The downturn severely impacted economic output and employment, leading to widespread social and fiscal challenges. The subsequent recovery demonstrated Portugal’s resilience and the effectiveness of structural reforms implemented to restore economic stability. The 2008 financial crisis had resulted in significant domestic challenges for Portugal, including high public deficits and excessive levels of sovereign debt. These fiscal imbalances constrained the government’s ability to stimulate the economy and maintain public services, necessitating external assistance. The crisis exposed vulnerabilities in the Portuguese economy, such as overreliance on external financing and structural inefficiencies, which required comprehensive policy responses. In April 2011, Portugal confirmed a financial bailout package amounting to €78 billion from the European Union, following similar bailouts extended to Greece and the Republic of Ireland. This assistance was aimed at stabilizing the Portuguese economy, restoring market confidence, and supporting fiscal consolidation efforts. The bailout imposed stringent conditions on Portugal, including austerity measures and structural reforms, which were designed to address fiscal imbalances and enhance economic competitiveness. The government that assumed office in June 2011 faced the dual challenge of stimulating economic growth while maintaining the public deficit near the European Union average. Balancing these objectives required careful fiscal management and the implementation of reforms to improve public sector efficiency, labor market flexibility, and the business environment. The government’s policies focused on restoring fiscal sustainability without undermining the nascent economic recovery. Portugal is home to several globally recognized companies that have established significant international presence in their respective industries. The Navigator Company, for instance, is a major player in the international paper market, known for its high-quality pulp and paper products. Sonae Indústria holds the distinction of being the world’s largest producer of wood-based panels, supplying a diverse range of markets with innovative materials. Corticeira Amorim is the global leader in cork production, capitalizing on Portugal’s natural cork oak resources to dominate the cork industry worldwide. Other notable Portuguese companies include Conservas Ramirez, which is the oldest canned food producer in the country, with a longstanding tradition in food preservation and export. Cimpor ranks as the 10th largest cement producer globally, contributing significantly to the construction materials sector. EDP Renováveis stands as the third largest wind energy producer worldwide, reflecting Portugal’s commitment to renewable energy and sustainable development. Jerónimo Martins is a leading manufacturer of consumer products and holds a dominant position in the retail markets of Portugal, Poland, and Colombia. The company’s extensive retail network and product portfolio have made it a key player in the food distribution and consumer goods sectors across multiple countries. TAP Air Portugal, the national airline, is highly regarded for its safety record and serves as a vital link connecting Europe with Africa and Latin America, particularly Brazil. Its strategic routes and service quality have positioned it as a leading carrier in transcontinental air travel. Since the 1960s, education in Portugal has undergone gradual modernization and expansion, evolving to meet contemporary standards and global trends. This process has involved reforms in curricula, teaching methodologies, and infrastructure development, contributing to the enhancement of educational outcomes. By the 21st century, Portugal’s education system had gained recognition for adopting world-standard practices, fostering a skilled and knowledgeable workforce. According to the 2015 Programme for International Student Assessment (PISA), Portuguese 15-year-old students scored significantly above the OECD average in reading literacy, mathematics, and science. These results indicated substantial improvements in student performance and educational quality, positioning Portugal favorably among developed nations in terms of academic achievement. The PISA outcomes reflected the effectiveness of educational reforms and investments made over previous decades. Portugal is also home to several world-class universities and business schools that contribute to the production of internationally renowned managers and professionals. These institutions attract an increasing number of foreign students, enhancing the country’s academic reputation and fostering international collaboration. The presence of high-quality higher education institutions supports innovation, research, and human capital development, which are critical for sustaining economic growth. Despite these advancements, Portugal has the highest emigration rate as a proportion of its population within the European Union. More than two million Portuguese people, representing approximately 20% of the population, live abroad. This significant diaspora reflects historical and contemporary migration patterns driven by economic, social, and political factors. The Portuguese emigrant community maintains strong ties with the homeland, contributing to cultural exchange and economic remittances.

During the period of the Portuguese Empire, which spanned from the 15th century until the Carnation Revolution of 1974, Portugal’s economy was fundamentally shaped by its extensive colonial possessions across Asia, Africa, and South America. The empire’s economic foundation rested primarily on trade and the extraction of raw materials from these overseas territories, which provided a diverse array of commodities that fueled Portugal’s commercial and industrial activities. The empire’s vast reach enabled Portugal to access and control key resources and trade routes, establishing it as a significant maritime and commercial power for several centuries. The colonial exports that underpinned Portugal’s economy were varied and region-specific, reflecting the geographic and ecological diversity of its territories. From Asia, Portugal imported valuable goods such as spices—including pepper, cinnamon, and cloves—alongside silk, dyes, porcelain, and precious gems, commodities that were highly prized in European markets and contributed substantially to the empire’s wealth. African colonies supplied ivory, timber, oil, diamonds, and slaves, the latter tragically fueling the transatlantic slave trade, which was a critical yet morally reprehensible component of the colonial economy. In South America, particularly Brazil, the Portuguese exploited natural resources such as sugar cane, dyes, various woods, and gold, which became central to the colonial economy and significantly influenced Portugal’s economic development during the early modern period. Portugal’s transcontinental empire was characterized by its possession of abundant natural resources and large expanses of largely unexploited territories. This combination positioned Portugal among the world’s most powerful nations during the height of its imperial influence. The empire’s strategic locations and resource wealth allowed it to maintain a global presence and economic influence disproportionate to its relatively small size in Europe. However, the empire’s economic model was heavily dependent on colonial exploitation and trade, which eventually faced challenges as independence movements and global economic shifts emerged. A pivotal moment in the history of the Portuguese colonial empire occurred in 1822 when Brazil, Portugal’s largest and most economically significant colony, declared and achieved independence. Despite the loss of Brazil, Portugal retained control over its African colonies, most notably Angola and Mozambique. These territories experienced reasonable economic growth throughout the 19th and 20th centuries, continuing to contribute to Portugal’s economy until the decolonization process culminated in the Portuguese withdrawal in 1975 following the Carnation Revolution. The retention of these colonies allowed Portugal to maintain a degree of imperial economic activity well into the modern era, even as other European powers began to dismantle their empires. On the eve of the Carnation Revolution, which was a military coup that took place on 25 April 1974, the Portuguese economy and its overseas territories were experiencing growth rates that exceeded the European average. This period was marked by rising average family purchasing power, which reflected improving living standards and evolving consumption patterns among the Portuguese population. The economic expansion was not limited to metropolitan Portugal but extended into the overseas provinces, where infrastructure development and industrial activities were increasing. These trends indicated a dynamic economy that was integrating modern consumption and investment behaviors. This economic growth fostered increased investment in capital equipment, which enhanced industrial capacity and productivity. Concurrently, consumption expenditure on both durable goods—such as automobiles, household appliances, and furniture—and nondurable consumer goods—including foodstuffs and clothing—rose significantly. These changes signaled a shift towards a more consumer-oriented economy, with expanding markets and diversified industrial output. The increased capital formation and consumer demand were mutually reinforcing, contributing to sustained economic momentum during this period. The Estado Novo regime, which governed Portugal from 1933 until the Carnation Revolution, implemented economic policies that promoted the formation and consolidation of large business conglomerates. This corporatist approach was designed to facilitate economic expansion by organizing the economy into structured groups that could coordinate production, investment, and labor relations more effectively. The regime’s policies encouraged the development of powerful industrial and commercial groups that dominated key sectors of the economy, thus shaping the structure and dynamics of Portuguese capitalism during the mid-20th century. The corporatist policy resulted in the concentration of much of the Portuguese economy in the hands of several dominant conglomerates, colloquially known as the “seven magnificent.” These conglomerates operated in a manner analogous to South Korean chaebols and Japanese keiretsus and zaibatsus, exhibiting close interlinkages between firms, family ownership, and diversified industrial activities. This structure allowed them to wield significant economic influence and facilitated coordinated growth strategies that aligned with the Estado Novo’s developmental objectives. The “seven magnificent” became emblematic of Portugal’s unique model of economic organization during this era. Among the most prominent conglomerates within the “seven magnificent” were those founded and controlled by influential families such as the Champalimaud, Mello (which headed the CUF group), Amorim, and Santos (associated with the Jerónimo Martins group). These families established and maintained extensive business empires that spanned multiple sectors, combining industrial production, finance, and trade. Their enterprises played a critical role in shaping the Portuguese economy, both domestically and in the overseas territories, and were instrumental in driving the country’s mid-century economic expansion. The CUF (Companhia União Fabril) group stood out as the largest and most diversified Portuguese conglomerate during this period. At its peak, CUF was not only the largest industrial group in Portugal but also the largest in the Iberian Peninsula, and it ranked among the five largest industrial conglomerates in Europe. This remarkable scale reflected CUF’s extensive involvement in a wide range of industries and its ability to adapt to changing economic conditions. CUF’s prominence underscored the central role of conglomerates in Portugal’s industrial development and economic modernization. CUF’s core business activities encompassed a broad spectrum of sectors, including cement production, chemicals, petrochemicals, agrochemicals, textiles, beer and beverages, metallurgy, naval engineering, electrical engineering, insurance, banking, paper manufacturing, tourism, and mining. This diversification allowed CUF to mitigate risks and capitalize on synergies across industries, contributing to its resilience and sustained growth. The group’s involvement in both heavy industry and consumer-oriented sectors illustrated the multifaceted nature of Portugal’s economic structure under Estado Novo corporatism. While CUF’s headquarters and principal operations were based in mainland Portugal, the conglomerate also maintained branches, manufacturing plants, and development projects across Portuguese overseas territories, particularly in Angola and Mozambique. These overseas operations were integral to CUF’s business model, enabling it to exploit the natural resources and emerging markets in the colonies. The presence of CUF in the overseas provinces facilitated technology transfer, infrastructure development, and industrialization efforts, which in turn supported the economic growth of these territories during the colonial period. In addition to the large conglomerates, medium-sized family-owned companies played a significant role in various specialized industries within Portugal. These firms were particularly active in textiles, with notable centers in Covilhã and the northwest region of the country, areas historically associated with wool and fabric production. Other specialized industries included ceramics, porcelain, glass, and crystal manufacturing, concentrated in towns such as Alcobaça, Caldas da Rainha, and Marinha Grande. These industries combined traditional craftsmanship with industrial techniques, contributing to regional economic development and export capacity. Further medium-sized enterprises specialized in engineered wood products, exemplified by SONAE near Porto, which became a significant player in the wood processing sector. The canned fish industry, including some of the world’s oldest continuously operating companies located in the Algarve and northwest Portugal, was another important sector, reflecting the country’s maritime heritage and access to rich fishing grounds. Additional economic activities encompassed fishing, food and beverage production, tourism, and agriculture/agribusiness, highlighting the diversity of Portugal’s industrial and commercial landscape beyond the dominant conglomerates. Tourism emerged as a well-established sector in several Portuguese regions, notably Estoril, Cascais, and Sintra along the Portuguese Riviera. These areas became popular destinations for both domestic and international visitors, offering coastal resorts, cultural heritage sites, and recreational amenities. Since the 1960s, tourism in the Algarve also experienced significant growth, evolving into an international attraction renowned for its beaches, climate, and hospitality infrastructure. The expansion of tourism contributed to regional economic diversification and provided employment opportunities in service industries. Agricultural and agribusiness activities remained prominent in regions such as Ribatejo and Alentejo, often referred to as Portugal’s breadbasket due to their extensive arable lands and favorable climate. These areas supported the production of cereals, wine, olive oil, and livestock, forming the backbone of rural economies. A notable development in agribusiness was the establishment of the Cachão Agroindustrial Complex in Mirandela, Northern Portugal, in 1963. This complex represented a modern approach to agricultural production and processing, integrating industrial techniques to enhance productivity and value addition. Despite the ongoing industrialization and urbanization, rural populations in Portugal remained heavily committed to agrarian lifestyles. Many families relied exclusively on agriculture for their livelihoods or supplemented their incomes through farming, animal husbandry, and forestry activities. This persistence of traditional rural economies underscored the uneven pace of economic transformation and the continued importance of primary sector activities in the national economy. From the 1920s onward, Portuguese overseas territories demonstrated impressive economic growth and development, even amidst the challenges posed by the Portuguese Colonial War (1961–1974). This protracted counterinsurgency conflict against independence guerrillas in Angola, Mozambique, and Guinea-Bissau did not halt economic expansion in the colonies. Instead, sectors such as oil extraction, coffee and cotton cultivation, cashew and coconut production, timber harvesting, and mineral exploitation—including diamonds—continued to thrive. The colonies also developed industries in metals such as iron and aluminium, as well as agricultural products like bananas, citrus fruits, tea, and sisal. Additionally, sectors producing beer, cement, fish and other seafood, beef, and textiles experienced growth, reflecting a diversified and robust colonial economy. Labor relations during this period were tightly controlled by the Estado Novo regime, which prohibited labor unions and did not enforce minimum wage policies. This restrictive labor environment limited workers’ rights and bargaining power, contributing to a labor market characterized by low wages and limited protections. Despite these conditions, the expanding economy of the 1960s brought about improvements in living standards for many Portuguese citizens. Economic growth facilitated better access to consumer goods, housing, and services, which in turn catalyzed significant social changes. One notable social transformation was the rapid incorporation of women into the labor market, a development largely driven by the demands of the colonial wars in Africa. As many men were conscripted or engaged in military service overseas, women increasingly entered industrial and service sectors to fill labor shortages. This shift not only altered traditional gender roles but also contributed to broader changes in Portuguese society, including greater female economic participation and evolving family dynamics. Marcelo Caetano, who succeeded António Salazar as the head of the Estado Novo regime, continued to promote economic growth while introducing social policy reforms aimed at improving welfare. Among his significant initiatives was the introduction of monthly pensions for rural workers who had never contributed to social security. This reform sought to address longstanding inequities in the social protection system by extending benefits to previously excluded populations, thereby enhancing social cohesion and reducing poverty in rural areas. Caetano’s pension reform was designed with multiple objectives: to enhance equity by providing social safety nets to vulnerable groups; to reduce fiscal and actuarial imbalances within the pension system; and to improve overall economic efficiency. The reform implemented less labor market-distortive contribution mechanisms, which aimed to encourage employment and economic activity. Additionally, by enabling pension fund savings to increase, the reform facilitated greater investment in the economy, supporting continued growth and development. These policy measures reflected an attempt to balance social welfare improvements with economic pragmatism under the Estado Novo regime’s corporatist framework.

Between 1961 and 2003, the demographic landscape of Portugal underwent significant transformations, as documented by population data from the Food and Agriculture Organization (FAO) in 2005. Initially characterized by a pattern of emigration, Portugal experienced a dramatic reversal following the Carnation Revolution of 1974. This political upheaval precipitated the arrival of a large number of retornados, refugees who were primarily Portuguese settlers and their descendants returning from former African colonies. Estimates of this influx vary widely, ranging from 500,000 to as many as one million individuals, representing a substantial demographic and social challenge for the country. The retornados not only increased the population but also placed considerable strain on Portugal’s economy and social infrastructure during a period already marked by instability. The immediate aftermath of the Carnation Revolution was defined by economic turmoil and negative growth, as the new regime embarked on a series of radical reforms that dramatically altered the country’s economic structure. Industries that had previously been privately owned were nationalized en masse, reflecting the leftist ideology that gained ascendancy during the revolutionary period. This wave of nationalizations coincided with the severing of Portugal’s colonial ties, particularly with African territories such as Angola, Mozambique, and Guinea-Bissau. The loss of these colonies had profound economic repercussions, as Portugal abruptly lost access to raw materials, markets, and investment opportunities that had underpinned its heavy industry. Consequently, industrial production plummeted, and the country faced an abrupt halt in the development of key sectors. All major economic sectors suffered severe setbacks during this period of upheaval. Manufacturing, mining, chemical industries, defense production, finance, agriculture, and fishing each experienced significant declines, reflecting the widespread disruption of economic activity. The manufacturing sector, which had been a driver of growth in the preceding decade, was particularly hard hit as factories were nationalized and management expertise was often replaced by politically motivated appointments. Mining operations faced logistical challenges and declining investment, while the chemical and defense industries were destabilized by shifting government priorities and resource constraints. The financial sector was destabilized by nationalization and the loss of investor confidence, while traditional sectors such as agriculture and fishing struggled to adapt to new policies and the loss of colonial markets. This multifaceted economic decline underscored the depth of the crisis Portugal faced in the immediate post-revolutionary years. Portugal’s economic trajectory shifted dramatically in the mid-1970s, transitioning from the highest growth rate in Western Europe to the lowest. The country endured several consecutive years of negative economic growth, a stark contrast to the robust expansion seen in the previous decade. This downturn was not only a result of structural changes and nationalizations but was also exacerbated by the emigration of skilled workers and entrepreneurs. Political intimidation and uncertainty prompted many professionals and business leaders to leave the country, draining Portugal of vital human capital at a time when it was most needed. Simultaneously, the financial burden of accommodating thousands of African retornados refugees placed additional strain on public finances and social services, further compounding the economic difficulties. Prior to the Carnation Revolution, Portugal’s economy had experienced significant growth, particularly between 1961 and 1973. By 1973, total output, measured as Gross Domestic Product (GDP) at factor cost, had increased by 120% in real terms compared to 1961. This period was characterized by robust average annual growth rates across multiple economic indicators: GDP grew at an average rate of 6.9%, industrial production expanded by 9%, private consumption increased by 6.5%, and gross fixed capital formation—a key measure of investment—rose by 7.8%. These figures reflect a dynamic and rapidly modernizing economy that was beginning to close the gap with more developed European nations. The political landscape shifted dramatically following the 1974 leftist military coup, known as the Carnation Revolution. The Movimento das Forças Armadas (MFA), which had initially espoused moderate reformism and a commitment to democracy, soon abandoned these positions. Instead, the MFA initiated a period known as the Processo Revolucionário Em Curso (PREC), during which sweeping nationalizations and land expropriations were carried out. This radical redistribution of economic assets was driven by ideological commitments to socialism and the dictatorship of the proletariat, concepts that had long been suppressed under the Estado Novo regime but now found expression in revolutionary policies. The PREC period was marked by significant social upheaval and economic dislocation, as the state assumed control over large segments of the economy and sought to restructure Portuguese society along socialist lines. The ideological framework of the dictatorship of the proletariat granted extensive powers to the working class during the PREC, fundamentally altering the relationship between labor, capital, and the state. Workers’ councils and unions gained unprecedented influence over production and management decisions, often leading to conflicts with traditional business interests and bureaucratic inefficiencies. While these measures were intended to empower the working class and promote social justice, they had long-lasting negative effects on Portugal’s economic growth and development. The uncertainty and instability generated by these policies discouraged investment, disrupted production, and contributed to the economic stagnation that characterized the late 1970s. Portugal’s relative economic underdevelopment within Europe was evident as early as 1960, when its per capita GDP stood at only 38% of the average for the European Community’s twelve member states (EC-12). This low level of income reflected the country’s predominantly agrarian economy, limited industrial base, and relatively low levels of technological development. However, the late Estado Novo regime under António de Oliveira Salazar witnessed a shift in economic policy influenced by a new generation of technocrats. These experts, possessing advanced knowledge in economics and industrial technology, advocated for liberalization and an outward-oriented growth strategy. Their influence contributed to a gradual improvement in Portugal’s economic performance, raising per capita GDP to 48% of the EC-12 average by 1968. This period saw increased integration with European markets and a focus on export-led growth. By 1973, on the eve of the Carnation Revolution, Portugal’s per capita GDP had further increased to 56.4% of the EC-12 average, reflecting sustained economic progress. This improvement was underpinned by continued industrial expansion, increased investment, and diversification of the economy. However, the revolutionary turmoil of 1975 interrupted this upward trajectory, causing a decline in per capita GDP to 52.3% of the EC-12 average, marking the lowest point during the revolutionary period. The economic dislocation and policy uncertainty of the PREC years reversed much of the progress made in the previous decade, highlighting the fragility of Portugal’s economic gains. Following the revolutionary period, Portugal’s real GDP growth began to converge toward the European Community average after 1985. By 1991, per capita GDP had recovered to 54.9% of the EC average, slightly surpassing the level recorded during the most difficult years of the revolution. This recovery was facilitated by economic stabilization, structural reforms, and increased integration into European markets, including preparations for European Union membership. Portugal’s relative economic position fluctuated in the following years; notably, it overtook Greece in GDP per capita in 1992 but fell below it again in 1993. This relative positioning persisted until 2013, when Greece was severely affected by the sovereign debt crisis, altering the comparative economic landscape of Southern Europe. Portuguese merchandise exports demonstrated remarkable growth in the years leading up to the Carnation Revolution. Between 1959 and 1973, exports expanded at an impressive annual rate of 11%, reflecting the country’s increasing integration into global markets and the diversification of its industrial base. In 1960, Portuguese exports were concentrated in a limited range of products, including canned fish, raw and manufactured cork, cotton textiles, and wine. These traditional goods reflected the country’s historical economic strengths and resource endowments. However, by the early 1970s, prior to the 1974 military coup, Portugal’s export portfolio had diversified significantly to include both consumer and capital goods. This diversification was indicative of broader industrial development and the emergence of export-oriented sectors. Several Portuguese industrial sectors became increasingly export-oriented during this period, with over 20% of manufactured output being exported by 1973. This shift towards export-led growth was supported by government policies aimed at promoting industrialization and improving competitiveness. The expansion of export markets provided a vital source of foreign exchange and contributed to the country’s economic dynamism. The growth of export-oriented industries also facilitated technological upgrading and the development of managerial expertise, laying the groundwork for future economic modernization. The services sector in Portugal experienced substantial growth in its share of GDP during the late 20th century. Between 1973 and 1990, the sector’s contribution to GDP increased by 16 percentage points, rising from 39% to 55.5%. This expansion was driven largely by the growth of civil service employment and the rising costs associated with public administration. The post-revolutionary period saw a significant increase in the size and scope of the public sector, reflecting the state’s expanded role in the economy and society. Additionally, the tourism industry experienced notable growth during the 1980s, contributing to the services sector’s expansion and providing an important source of foreign exchange and employment. However, the rapid growth of the services sector occurred at the expense of more sustainable and productive sectors such as manufacturing, exporting, and technology- or capital-intensive industries. The shift towards a service-based economy raised concerns about the long-term competitiveness and productivity of the Portuguese economy. While services such as tourism and public administration generated employment and income, they generally exhibited lower productivity growth compared to industrial sectors. This structural shift highlighted the challenges Portugal faced in balancing economic development with the need to maintain a diversified and competitive industrial base.

Portugal’s accession to the European Communities in 1986 marked a pivotal moment in the country’s economic trajectory, ushering in a period of stable growth and modernization largely driven by enhanced trade integration and substantial financial support from the European Union. Membership facilitated the expansion of Portugal’s trade ties with other member states, enabling Portuguese businesses to access larger markets and benefit from the removal of trade barriers. Concurrently, significant inflows of EU structural and cohesion funds were directed toward upgrading the country’s infrastructure, including transportation networks, energy systems, and telecommunications, which collectively improved productivity and competitiveness. These investments were instrumental in bridging the development gap between Portugal and more advanced European economies, laying the groundwork for sustained economic progress. Between 1988 and 1991, the Portuguese public sector experienced a moderate increase in the number of civil servants, rising from 485,368 to 509,732 employees. This growth was relatively restrained compared to the more excessive and unsustainable expansion of state employment that occurred in subsequent years up to 2005. The controlled increase during this period reflected efforts to balance public sector needs with fiscal responsibility, avoiding the pitfalls of overstaffing that would later strain public finances. This measured approach to public employment was part of broader economic reforms aimed at enhancing efficiency and maintaining macroeconomic stability during a time of significant structural transformation. From 1988 to 1993, under the leadership of Prime Minister Aníbal Cavaco Silva, Portugal underwent radical economic changes characterized by a notable shift in the composition of its production sectors. The output of tradable goods—those goods and services that could be exported or competed with internationally—experienced a sharp and rapid decline, signaling a structural reorientation of the economy. In contrast, the non-tradable goods sector, which includes services and products consumed domestically and less exposed to international competition, gained increasing importance. This transition reflected broader trends in the Portuguese economy as it adapted to new market realities and the pressures of integration within the European Communities, although it also raised concerns about competitiveness and long-term growth potential. Following a recession in 1993, Portugal’s economy rebounded with vigor, achieving an average annual growth rate of 3.3% in the subsequent years. This rate of expansion was significantly higher than the average growth observed across the European Union during the same period, indicating a period of relative economic dynamism for Portugal. However, despite this robust recovery, the growth rates remained below those experienced prior to the 1974 military coup, suggesting that while progress was made, the country had yet to fully recapture its earlier economic momentum. The post-recession growth was supported by structural reforms, increased investment, and the benefits of EU membership, which collectively enhanced economic resilience. In preparation for joining the Economic and Monetary Union (EMU), Portugal committed to a series of fiscal consolidation measures and structural reforms designed to meet the Maastricht criteria. These efforts focused on reducing the fiscal deficit, improving public sector efficiency, and stabilizing the macroeconomic environment. As a result, Portugal achieved greater exchange rate stability and experienced a decline in inflation rates, which had previously been a persistent challenge. Additionally, interest rates fell following the country’s entry into the EMU, reflecting increased investor confidence and the credibility gained from adherence to the union’s fiscal and monetary frameworks. These developments contributed to a more stable economic environment conducive to growth and investment. The reduction in interest rates had a particularly beneficial effect on Portugal’s public finances by lowering the cost of servicing government debt. This decrease in borrowing costs facilitated the country’s ability to meet fiscal targets during the late 1990s, enabling the government to manage its budget deficits more effectively and reduce the overall debt burden. The improved fiscal position was critical in maintaining compliance with EMU requirements and ensuring continued access to capital markets under favorable conditions. It also provided the government with greater fiscal space to invest in priority areas and support economic development initiatives. Portugal officially qualified for the EMU in 1998, joining the eurozone alongside ten other European countries. The introduction of the euro currency on 1 January 1999 marked a significant milestone in Portugal’s economic integration, replacing the Portuguese escudo with a shared European currency. This transition facilitated trade, investment, and financial transactions within the eurozone by eliminating exchange rate risks and reducing transaction costs. The adoption of the euro also symbolized Portugal’s commitment to deeper economic and political integration within Europe, aligning its monetary policy with that of the European Central Bank. Portuguese euro coins featured distinctive national designs on their obverse sides, created by the artist Vitor Manuel Fernandes dos Santos. These designs were inspired by the three seals of Portugal’s first king, Dom Afonso Henriques, reflecting the country’s rich historical heritage and national identity. Each denomination of the euro coins carried one of these motifs, blending cultural symbolism with the practical function of currency. This artistic choice underscored Portugal’s desire to maintain a visible national presence within the broader framework of European monetary unity. In 1999, Portugal experienced a favorable economic environment characterized by a low inflation rate of 2.4%, robust economic growth, declining interest rates, and low unemployment. These indicators reflected the positive effects of EMU membership and the structural reforms implemented in prior years. The low inflation rate contributed to maintaining purchasing power and economic stability, while falling interest rates supported investment and consumption. Low unemployment levels indicated a relatively healthy labor market, further reinforcing the country’s economic progress at the turn of the millennium. During the late 1990s and early 2000s, household debt in Portugal expanded rapidly, raising concerns among economic observers and international organizations. The European Commission, the Organisation for Economic Co-operation and Development (OECD), and other institutions issued advisories urging the Portuguese government to exercise greater fiscal restraint and implement measures to curb the growth of private indebtedness. The rapid increase in household borrowing was attributed to factors such as easier access to credit, low interest rates, and rising consumer confidence, but it also posed risks to financial stability and long-term economic sustainability. The warnings highlighted the need for prudent macroeconomic management to prevent potential vulnerabilities. In 2001, Portugal’s public deficit exceeded the European Union’s self-imposed limit of 3% of gross national product (GNP), placing the country at risk of sanctions or increased financial supervision by EU authorities. This breach of the Stability and Growth Pact rules underscored persistent fiscal challenges and raised concerns about the sustainability of public finances. The elevated deficit reflected structural budgetary imbalances, increased public spending, and slower-than-expected economic growth. The situation necessitated corrective actions to restore fiscal discipline and maintain credibility within the European framework. Economic growth in Portugal slowed in late 2001 and continued into 2002, complicating efforts to implement fiscal austerity measures. The deceleration in economic activity reduced government revenues and increased the social costs of tightening fiscal policy, making austerity both more difficult and more painful to execute. The slowdown was influenced by both domestic factors and broader global economic conditions, including the aftermath of the dot-com bubble burst and geopolitical uncertainties. This period highlighted the challenges of balancing fiscal consolidation with the need to support economic growth and social cohesion. Despite these difficulties, Portugal made significant strides in raising its standard of living relative to other European Union partners. Between 1985 and early 2002, the country’s gross domestic product (GDP) per capita on a purchasing power parity (PPP) basis increased from 51% to 78% of the EU average. This improvement reflected the cumulative effects of economic reforms, EU membership benefits, and increased productivity. The rise in GDP per capita signaled progress in closing the income gap with wealthier European nations, enhancing the quality of life for many Portuguese citizens. However, by 2005, Portugal’s GDP per capita had declined to 72% of the EU average, which by then included 25 member states. This decline occurred despite the fact that seven of the newer member countries had lower GDP per capita figures than Portugal. The relative drop indicated that Portugal’s economic growth had slowed and that other countries were catching up or surpassing it in terms of income levels. This trend raised concerns about the country’s competitiveness and ability to maintain its position within the expanding European Union. At the end of 2001, unemployment in Portugal was recorded at 4.1%, a relatively low rate compared to the European Union average at that time. This low unemployment level suggested a relatively healthy labor market and the capacity of the Portuguese economy to absorb workers. However, this favorable situation would deteriorate in subsequent years as economic challenges intensified. By 2006, Portugal’s GDP growth rate had slowed dramatically to 1.3%, the lowest among all European Union member states and across the entire European continent. This sluggish growth reflected structural weaknesses, reduced competitiveness, and the lingering effects of earlier economic difficulties. The low growth rate underscored the urgency of implementing reforms to stimulate productivity, innovation, and investment in order to revitalize the economy. During the 2000s, several countries that had joined the European Union more recently, such as the Czech Republic, Malta, and Slovenia, surpassed Portugal in GDP per capita. This shift indicated a relative decline in Portugal’s economic standing within the EU and highlighted the dynamic nature of economic convergence and divergence among member states. The outperformance of these countries was attributed to faster growth rates, successful reforms, and increased integration into European and global markets. Between 2010 and 2012, Portugal’s GDP per capita on a purchasing power parity basis fell below that of Slovakia within Europe and Seychelles outside Europe. This decline reflected the severity of the economic crisis that affected Portugal during this period, including the sovereign debt crisis and the implementation of austerity measures. The fall below Slovakia, a country with a smaller and less developed economy, was particularly striking and indicative of Portugal’s economic struggles. In 2013, estimates placed Portuguese GDP per capita within approximately plus or minus US$1,000 of the GDP per capita figures for Greece, Estonia, and Lithuania. This proximity underscored Portugal’s position among countries with similar income levels in Europe, many of which had also faced significant economic challenges. The comparison highlighted the shared difficulties and the ongoing process of economic adjustment within the region. Portugal’s GDP per capita declined from just over 80% of the EU 25 average in 1999 to just over 70% in 2007, reflecting a period of poor economic performance relative to the broader European Union. This downward trend illustrated the country’s difficulties in sustaining growth and competitiveness amid increasing integration and globalization. The decline also pointed to structural issues that impeded economic convergence with more advanced EU economies. In April 2007, The Economist magazine characterized Portugal as “a new sick man of Europe,” drawing attention to the country’s economic difficulties and stagnation. This label reflected widespread concerns about Portugal’s low growth, rising unemployment, fiscal imbalances, and structural weaknesses. The phrase evoked historical parallels and served as a warning about the potential long-term consequences if reforms were not effectively implemented. Between 2002 and 2007, unemployment in Portugal increased sharply by 65%, rising from 270,500 unemployed individuals in 2002 to 448,600 in 2007. This substantial increase highlighted the deteriorating labor market conditions and the challenges faced by the Portuguese economy in creating sufficient employment opportunities. The rising unemployment contributed to social tensions and underscored the need for policies aimed at job creation and workforce development. In December 2009, the credit rating agency Standard and Poor’s downgraded Portugal’s long-term credit rating from “stable” to “negative.” The downgrade was attributed to structural economic weaknesses and weak competitiveness, which were expected to hinder the country’s economic growth and its ability to improve public finances and reduce debt levels. This assessment reflected investor concerns about Portugal’s fiscal sustainability and the risks associated with its economic outlook during the global financial crisis and subsequent sovereign debt turmoil. Despite these economic challenges, Portuguese subsidiaries of multinational corporations maintained high levels of productivity and competitiveness on the global stage. Companies such as Siemens Portugal, Volkswagen Autoeuropa, Qimonda Portugal (prior to the bankruptcy of its parent company), IKEA, Nestlé Portugal, Microsoft Portugal, Unilever/Jerónimo Martins, and Danone Portugal were recognized among the most productive worldwide. Their success demonstrated the capacity of Portugal’s industrial and service sectors to integrate into global value chains and contribute to economic activity. Since joining the European Communities in 1986, many Portuguese companies have expanded their operations internationally, becoming notable global players across various industries. Prominent examples include SONAE, a leading retail and telecommunications group; Amorim, a major cork producer; Sogrape, a significant wine exporter; EFACEC, an engineering and energy company; Portugal Telecom, a telecommunications provider; Jerónimo Martins, a retail and distribution conglomerate; Cimpor, a cement producer; Unicer, a beverage company; Millennium bcp, a banking institution; Lactogal, a dairy producer; Sumol + Compal, a beverage manufacturer; Delta Cafés, a coffee company; Derovo, a food producer; Critical Software, an IT services firm; Galp Energia and EDP, energy companies; Grupo José de Mello, a diversified conglomerate; Sovena Group, an olive oil producer; Valouro, an agribusiness company; Renova, a paper products manufacturer; Teixeira Duarte and Soares da Costa, construction firms; Portucel Soporcel, a pulp and paper company; Simoldes and Iberomoldes, mold manufacturers; Logoplaste, a packaging company; and TAP Portugal, the national airline. The international expansion of these companies has contributed to Portugal’s economic integration and competitiveness in global markets.

The Portuguese financial crisis, which emerged as a significant aspect of the broader European sovereign debt crisis, began to draw attention in early 2010. This crisis represented the most severe economic downturn Portugal had experienced since the 1970s, characterized by a deep recession that severely contracted the country’s GDP and strained public finances. The recession persisted for several years, with the initial signs of recovery only becoming apparent in late 2013. The crisis was marked by a combination of domestic fiscal imbalances and external economic pressures, which together precipitated a near-collapse of the Portuguese economy and necessitated international financial assistance. A revealing report published in January 2011 by the Portuguese newspaper Diário de Notícias shed light on the structural weaknesses that had accumulated over decades within the country’s public sector management. The report highlighted that from the Carnation Revolution in 1974 until 2010, successive democratic governments had fostered a culture of over-expenditure and speculative investment bubbles. This was often facilitated through opaque public-private partnerships (PPPs), which lacked transparency and accountability. The government’s reliance on external consultancy firms, many of which were ineffective, further exacerbated inefficiencies and fiscal slippage. Additionally, the report pointed to inflated management bonuses and a growing number of redundant public servants as key contributors to the fiscal deterioration. These systemic issues undermined the sustainability of public finances and heightened the vulnerability of the Portuguese economy to external shocks. Portugal’s economic difficulties were rooted in nearly four decades of risky credit expansion, unsustainable public debt accumulation, and the mismanagement of European structural and cohesion funds. These funds, intended to support regional development and economic convergence within the European Union, were often poorly allocated or inefficiently used, leading to suboptimal outcomes. During the tenure of Prime Minister José Sócrates, who governed from 2005 until 2011, the government failed to anticipate or adequately prepare for the looming crisis. Despite early warning signs, the administration was unable to implement effective measures to prevent the country’s descent into near-bankruptcy by 2011. The combination of fiscal mismanagement and external economic pressures culminated in a severe sovereign debt crisis that necessitated international intervention. During this period, the acronym PIIGS became widely used by bond analysts and financial media to refer collectively to the five Southern European countries experiencing severe sovereign debt problems: Portugal, Italy, Ireland, Greece, and Spain. Portugal’s inclusion in this group underscored the severity of its fiscal and economic challenges, as well as the heightened risk perceived by international investors. The PIIGS label, while controversial, reflected the common structural vulnerabilities shared by these economies, including high public debt levels, fiscal deficits, and weak competitiveness. One of the notable contributors to Portugal’s fiscal pressures was the significant increase in the number of civil servants over the two decades leading up to the crisis. The public sector workforce expanded from 509,732 employees in 1991 to 727,701 in 2011. This growth in public employment placed considerable strain on the government’s wage bill and social security expenditures, thereby exacerbating budgetary imbalances. The expansion was partly driven by political decisions aimed at reducing unemployment and expanding public services, but it ultimately contributed to the unsustainable trajectory of public finances. Four major factors played a critical role in deepening the Portuguese financial crisis. The first was the financial collapse of Banco Português de Negócios (BPN), which was triggered by the accumulation of toxic credits and illegal gains by its administrators. The bank’s failure necessitated its nationalization in November 2008 to prevent a systemic banking collapse. The cost of this intervention to the Portuguese State was substantial, amounting to €3,405 million by 2012. In 2010 alone, the impact on public accounts was €1,803 million, equivalent to 1.2% of Portugal’s GDP, highlighting the significant fiscal burden imposed by the bank’s collapse. The second major factor was the bankruptcy of Banco Privado Português (BPP), which was dissolved by the Banco de Portugal, the country’s central bank, in April 2010. Similar to BPN, the failure of BPP resulted in considerable losses for taxpayers, who bore €450 million in 2010 through state guarantees extended to the bank’s creditors. These banking sector failures not only strained public finances but also eroded confidence in the Portuguese financial system, contributing to the broader economic crisis. The third major contributor to the crisis was budgetary slippage in Public–Private Partnerships (PPPs) between 2008 and 2010, which amounted to €560.2 million. The overruns were predominantly due to road concession rents exceeding their budget by €425.5 million. This issue intensified in 2011, when road concession rent overruns increased by 28% to €197.4 million above budget and by 42.3% to €266.3 million above the 2010 forecasts. Overall, state spending on road concession rents reached €896.6 million. In addition to the road sector, significant budget overruns were also recorded in health and rail PPP projects, reflecting systemic weaknesses in the planning and management of these partnerships. These fiscal slippages contributed to the widening budget deficit and undermined efforts to restore fiscal discipline. The fourth major factor involved state-owned companies contracting complex financial derivative instruments known as swaps, which exposed them to potential losses exceeding €3,000 million. To address these liabilities, in 2013 the Portuguese government allocated €898 million in the Amending Government Budget to cover the costs of settling these contracts. The companies involved included major public transport entities such as Lisbon Metro, which accounted for €548 million of the settlement costs, and Porto Metro, with €315 million. Other beneficiaries included REFER, the state-owned railway infrastructure manager, which received €20 million, and Estradas de Portugal, the national roads company, which received €15 million. At the time, REFER was administered by former Finance Minister Maria Luís Albuquerque. These financial obligations further strained public finances and complicated the government’s efforts to stabilize the economy. In April 2011, faced with mounting fiscal pressures and an unsustainable debt burden, Portugal secured a €78 billion bailout package from the International Monetary Fund (IMF) and the European Union (EU). This intervention followed similar bailouts for Greece and Ireland, reflecting the contagion risk within the Eurozone’s peripheral economies. The bailout was accompanied by stringent austerity measures and structural reforms aimed at restoring fiscal discipline and enhancing competitiveness. However, the aid package also provoked significant political and social repercussions. Senior policymakers in Germany, a leading contributor to the bailout funds, advocated for harsh penalties and strict conditionality for aid recipients. This stance fueled social unrest within Portugal and other affected countries, contributing to a rise in germanophobia and euroscepticism. The crisis environment also facilitated the emergence and growth of far-left and far-right political parties across Southern Europe, including SYRIZA and Golden Dawn in Greece, as well as the Five Star Movement and Lega Nord in Italy, reflecting widespread dissatisfaction with the established political order and EU institutions. Public trust in EU institutions in Portugal experienced a marked decline during the crisis period. Surveys indicated that trust levels fell sharply from 65% in May 2007 to 34% in November 2012, while distrust increased from 24% to 59%. Although these figures demonstrated significant disillusionment, Portugal’s levels of EU distrust were less extreme than those recorded in Greece, where distrust reached 81%, and Spain, where it was 72%. This erosion of confidence reflected broader concerns about the perceived effectiveness and fairness of EU policies, particularly in relation to the management of the sovereign debt crisis and the imposition of austerity measures. In response to growing skepticism towards the European Union, Portugal sought to diversify its international economic and diplomatic relations. The country intensified efforts to strengthen ties with Africa, Brazil, and other Latin American nations, recognizing the historical and linguistic connections that could facilitate cooperation. Additionally, Portugal expanded its engagement with global powers such as China, the United States, and Switzerland, as well as other regions worldwide. These initiatives were reflected in increased foreign direct investment, expanded trade relationships, and evolving patterns of emigration, as Portuguese citizens and businesses sought opportunities beyond the traditional European markets. This strategic diversification aimed to reduce Portugal’s economic dependence on the EU and enhance its resilience to external shocks. The three-year EU aid program, which included the €78 billion support package, officially concluded in May 2014. Upon the program’s completion, the Portuguese government reaffirmed its commitment to continuing economic reforms designed to ensure fiscal sustainability and promote growth. While acknowledging that the bailout had played a crucial role in stabilizing the economy and restoring market confidence, government officials emphasized that significant challenges remained. These included the need to address structural weaknesses, improve competitiveness, and foster inclusive economic development to prevent a recurrence of the crisis and to secure long-term prosperity for Portugal.

The year 2014 marked a pivotal turning point for the Portuguese economy, initiating a period of sustained recovery that began in the third quarter of that year. After enduring years of economic contraction and austerity measures following the global financial crisis and the European sovereign debt crisis, Portugal’s GDP began to expand steadily, signaling a gradual restoration of economic vitality. By the second quarter of 2015, this positive momentum was reflected in official statistics, as Portugal recorded a quarterly GDP growth rate of 0.4%, accompanied by an annual growth rate of 1.5%. This resurgence was indicative of improving domestic demand and external trade conditions, which collectively contributed to the strengthening economic landscape. Concomitant with the revival in GDP growth was a notable and continuous decline in the unemployment rate, which had reached a peak of 17% in 2012 during the height of the economic crisis. By the third quarter of 2017, the unemployment rate had fallen substantially to 8.5%, reflecting enhanced labor market conditions and increased job creation. This reduction in unemployment was a critical component of the broader economic recovery, as improved employment levels bolstered household incomes and consumer confidence, further supporting economic expansion. Fiscal consolidation efforts during the early 2010s also yielded significant results, with the government budget deficit shrinking markedly from 11.2% of GDP in 2010 to 4.8% in 2014. This substantial reduction in the deficit was achieved through a combination of spending cuts, tax reforms, and structural adjustments aimed at restoring fiscal discipline and regaining investor confidence. The improved fiscal position was essential for stabilizing public finances and laying the groundwork for sustainable growth. In late June 2017, the International Monetary Fund (IMF) released an updated report that underscored a stronger near-term economic outlook for Portugal. The report highlighted increases in both investment and exports as key drivers of the improved economic performance. The IMF’s assessment reflected the positive effects of structural reforms, enhanced competitiveness, and a more favorable external environment, which collectively contributed to the acceleration of economic activity. Portugal’s fiscal achievements were further validated in 2016 when the country recorded a budget surplus, a milestone that led to its removal from the European Union’s Excessive Deficit Procedure. This procedural exit signified that Portugal had met the EU’s fiscal criteria, including maintaining a deficit below the 3% of GDP threshold, thereby restoring greater fiscal autonomy and reducing the risk of financial sanctions. The budget surplus was emblematic of the country’s improved fiscal management and economic resilience. By 2017, the Portuguese banking system had largely stabilized after a period of significant distress during the financial crisis. Despite this progress, challenges persisted, particularly regarding the high levels of non-performing loans (NPLs) and corporate debt, which continued to weigh on the banking sector’s balance sheets. The IMF recommended that Portugal address these issues proactively to attract more private investment and enhance financial sector stability. Tackling the legacy of impaired loans was seen as essential for unlocking credit growth and supporting broader economic development. The IMF further emphasized that sustained strong economic growth, coupled with continued public debt reduction, would be crucial in mitigating vulnerabilities associated with Portugal’s historically high indebtedness. This was especially pertinent in the context of anticipated reductions in monetary accommodation by central banks, which could increase borrowing costs. Maintaining fiscal discipline and fostering robust growth were therefore identified as key strategies to ensure long-term economic stability and resilience against external shocks. Despite these positive developments, Portugal’s economic indicators relative to other European countries revealed ongoing structural challenges. According to an OECD report, by 2021 Portugal’s GDP per capita measured in purchasing power parity (PPP) stood at $36,381. This placed Portugal as the fourth lowest among the 19 eurozone members and the eighth lowest among the 27 European Union member-states. The relatively modest GDP per capita highlighted the persistent gap between Portugal and many of its Western European counterparts, underscoring the need for continued efforts to enhance productivity and economic convergence. Moreover, several former economically disadvantaged Communist Bloc countries, now members of the European Union from Eastern Europe, had nearly reached or even surpassed Portugal in GDP (PPP) per capita by 2021. This trend illustrated the dynamic economic transformations occurring within the EU, where some Eastern European nations experienced rapid growth and structural improvements, narrowing the income disparities with older member states such as Portugal. Labor productivity in Portugal also lagged behind the EU average. In 2021, Portugal’s labor productivity, measured in PPP terms, was the fifth lowest among the 27 EU member-states, being approximately 35% below the EU average. This productivity gap reflected structural issues in the Portuguese economy, including lower levels of technological adoption, skills mismatches, and sectoral composition. By 2022, Portugal’s labor productivity had declined further to the fourth lowest position in the EU, with only Bulgaria and Greece exhibiting lower productivity levels. This decline underscored ongoing challenges in enhancing efficiency and competitiveness within the Portuguese labor market. Since joining the European Union, then known as the European Economic Community (EEC), in 1986, Portugal has been a net beneficiary of the EU budget. Structural and cohesion funds, along with agricultural subsidies, have played a significant role in supporting infrastructure development, social programs, and economic modernization. These financial transfers have been instrumental in facilitating Portugal’s economic development and integration into the broader European market. In the fourth quarter of 2024, Portugal recorded the highest GDP growth rate in the European Union, with an increase of 1.5% compared to the previous quarter, according to data released by Eurostat. This robust quarterly growth was indicative of strong domestic demand, investment activity, and export performance. Furthermore, Portugal ranked fifth among 27 European countries for quarterly real GDP per capita growth in 2024, achieving an increase of 0.68%. These figures highlighted Portugal’s dynamic economic performance relative to its European peers during this period. Household income growth in Portugal also demonstrated remarkable strength in 2024. The country achieved the second highest growth in household income, rising by 6.7%, significantly surpassing the OECD average growth rate of 0.9%. This substantial increase in household income reflected improvements in employment, wages, and social transfers, contributing to enhanced living standards and consumer spending capacity. Data published in January 2024 by Banco de Portugal, the country’s central bank, revealed a declining debt-to-GDP ratio, signaling improved external financial stability. Total net debt vis-à-vis the rest of the world decreased from 85.4% of GDP in June 2023 to 82.7% in September 2023. This reduction in external indebtedness indicated a strengthening balance of payments position and greater resilience to external shocks, reinforcing Portugal’s macroeconomic stability. Portugal’s fiscal performance in 2023 exceeded expectations, with the budget surplus surpassing forecasts by 1 billion euros. The country achieved a historic budget surplus equivalent to 1.2% of GDP, exceeding the target of 0.8%, which had been anticipated to amount to 2,191 million euros. This fiscal outperformance was attributed to higher-than-expected tax revenues, prudent expenditure management, and favorable economic conditions, further consolidating Portugal’s public finances. As of the fourth quarter of 2024, Portugal ranked sixth among European Union countries for the highest gold reserves by value in euros. The country held 382.66 tonnes of gold, valued at nearly 35 billion euros. These substantial gold reserves contributed to Portugal’s financial security and served as a strategic asset within the national reserves portfolio, reflecting prudent monetary and fiscal management.

Economic data for Portugal spanning from 1980 to 2024 encompasses a range of critical indicators that provide insight into the country’s economic performance and structural changes over more than four decades. These indicators include gross domestic product (GDP) measured both in billion US dollars at purchasing power parity (PPP) and nominal terms, GDP per capita in US dollars PPP and nominal terms, real GDP growth rates, inflation rates, unemployment rates, and government debt expressed as a percentage of GDP. Collectively, these metrics illustrate Portugal’s economic trajectory, highlighting periods of expansion, contraction, and recovery as well as the evolving challenges faced by the nation’s economy. In 1980, Portugal’s economy was characterized by a GDP of 63.5 billion US dollars in PPP terms, reflecting the purchasing power of the domestic currency relative to the United States dollar. The GDP per capita at that time stood at 6,503.6 US dollars PPP, indicating the average economic output per person when adjusted for price level differences. In nominal terms, the GDP was recorded at 32.6 billion US dollars, with a nominal GDP per capita of 3,338.8 US dollars, figures that do not account for inflation or purchasing power disparities. The real GDP growth rate in 1980 was a robust 6.7%, signaling strong economic expansion during that year. Inflation was measured at 5.9%, reflecting moderate upward pressure on prices, while the unemployment rate was 7.8%, indicating a relatively moderate level of joblessness. Data on government debt as a percentage of GDP was not available for this year, limiting insight into fiscal conditions at the time. Throughout the 1980s, Portugal’s economy experienced considerable fluctuations in growth rates. The real GDP growth rate varied significantly, with a notable contraction of -1.0% occurring in 1984, which marked a period of economic difficulty. Conversely, the economy rebounded strongly in 1987, achieving a high growth rate of 7.6%. Inflation rates during this decade were particularly volatile and elevated, peaking dramatically at 29.3% in 1984. This hyperinflationary period was followed by a gradual decline in inflation, which fell to 9.4% by 1987 as economic stabilization measures took effect. Unemployment rates during the 1980s ranged between 5.1% and 10.5%, reflecting labor market challenges amidst economic volatility. However, consistent data on government debt for this decade remains unavailable, complicating assessments of fiscal sustainability during this period. By 1990, Portugal’s economy had expanded substantially, with GDP reaching 138.5 billion US dollars in PPP terms and GDP per capita rising to 13,870.2 US dollars PPP. The nominal GDP for that year was 79.4 billion US dollars, with a nominal GDP per capita of 7,957.3 US dollars. The real GDP growth rate was strong at 7.9%, indicating robust economic activity. Inflation remained relatively high at 13.4%, although it was considerably lower than the peak levels seen in the mid-1980s. The unemployment rate had decreased to 4.2%, suggesting improvements in the labor market. Government debt was recorded at 60.2% of GDP, providing a benchmark for fiscal indebtedness as Portugal transitioned into the 1990s. Between 1991 and 1999, Portugal’s economy demonstrated steady growth and gradual improvements in key economic indicators. GDP in PPP terms increased from 148.0 billion US dollars in 1991 to 214.8 billion US dollars by 1999, while GDP per capita rose from 14,856.7 US dollars PPP to 21,021.2 US dollars PPP over the same period, reflecting rising living standards and economic output per person. Real GDP growth rates during the 1990s fluctuated, with a low of -0.7% recorded in 1993, indicating a brief recessionary phase, but generally remained positive and supportive of economic expansion. Inflation rates showed a marked decline during this decade, falling below 5% from 1994 onwards, signaling enhanced price stability. Unemployment rates exhibited a modest decline, moving from 5.1% at the start of the decade to 5.2% by 1999, reflecting a relatively stable labor market. Government debt as a percentage of GDP stabilized within a range of approximately 55% to 63%, suggesting a degree of fiscal consolidation and manageable public finances. The early 2000s were characterized by slower economic growth and some episodes of contraction. Real GDP growth rates varied between -0.9% in 2003, indicating a recessionary year, and a peak of 3.8% in 2000, reflecting a period of moderate expansion. Inflation remained low during this period, contributing to a stable macroeconomic environment. However, unemployment rates increased slightly, reaching 8.3% by 2005, which pointed to emerging labor market challenges. Concurrently, government debt rose to 72.2% of GDP in 2005, signaling increasing fiscal pressures and the need for prudent public finance management. From 2006 to 2008, Portugal’s economy experienced moderate growth. GDP in PPP terms increased from 279.7 billion US dollars in 2006 to 301.1 billion US dollars in 2008, while GDP per capita rose from 26,582.7 US dollars PPP to 28,520.1 US dollars PPP. Real GDP growth rates during this period remained positive but modest, with a rate of 0.3% recorded in 2008, indicating a slowdown as the global economy approached crisis. Inflation rates were relatively low, fluctuating between approximately 2.4% and 3.0%, contributing to price stability. Unemployment rates hovered around 8.3%, reflecting persistent challenges in the labor market. Government debt increased to 75.6% of GDP by 2008, highlighting growing fiscal vulnerabilities on the eve of the global financial crisis. The global financial crisis of 2008-2009 had a significant adverse impact on Portugal’s economy. In 2009, real GDP contracted by 3.1%, marking a sharp economic downturn. Inflation turned negative, with a deflation rate of -0.9%, indicating falling prices amidst weak demand. Unemployment rose markedly to 10.2%, reflecting the economic distress and job losses associated with the crisis. Government debt escalated sharply to 87.8% of GDP, underscoring the strain on public finances as the government increased borrowing to stabilize the economy and support social programs. Between 2010 and 2014, Portugal’s economy experienced considerable volatility. Real GDP growth rates fluctuated widely, ranging from a contraction of -4.1% in 2012, during the height of the Eurozone debt crisis, to a modest growth of 1.8% in 2014 as the economy began to recover. Inflation rates during this period varied between -0.2% and 3.6%, reflecting periods of both deflationary and inflationary pressures. Unemployment rates peaked at 17.2% in 2013, representing a severe labor market crisis with significant social implications. Government debt surged dramatically, reaching 132.5% of GDP by 2014, highlighting the severity of fiscal imbalances and the challenges of debt sustainability during this turbulent period. From 2015 to 2019, Portugal’s economy showed signs of recovery and stabilization. GDP in PPP terms grew from 313.6 billion US dollars in 2015 to 389.5 billion US dollars in 2019, while GDP per capita increased from 30,207.1 US dollars PPP to 37,616.2 US dollars PPP, indicating improvements in economic output and living standards. Real GDP growth rates averaged around 2.7% annually, reflecting steady economic expansion. Inflation rates remained low, fluctuating between 0.3% and 1.6%, contributing to a stable price environment. Unemployment rates decreased significantly from 12.9% in 2015 to 6.6% in 2019, signaling a marked improvement in the labor market. Government debt declined from 131.0% of GDP in 2015 to 116.1% in 2019, reflecting fiscal consolidation efforts and improved public finance management. The onset of the COVID-19 pandemic in 2020 caused a sharp contraction in Portugal’s economy. Real GDP shrank by 8.2%, representing a severe economic shock driven by lockdowns, reduced economic activity, and global disruptions. Inflation was slightly negative at -0.1%, indicating subdued demand and price pressures. Unemployment increased to 7.1%, reflecting job losses and labor market disruptions caused by the pandemic. Government debt rose sharply to 134.1% of GDP as the government implemented fiscal stimulus measures and increased spending to mitigate the pandemic’s economic impact. GDP in PPP terms fell to 370.4 billion US dollars, and GDP per capita declined to 35,662.8 US dollars PPP, underscoring the widespread economic challenges faced during this period. In 2021 and 2022, Portugal’s economy rebounded strongly from the pandemic-induced recession. GDP in PPP terms reached 402.7 billion US dollars in 2021 and further increased to 461.5 billion US dollars in 2022. GDP per capita rose to 38,690.8 US dollars PPP in 2021 and 44,085.7 US dollars PPP in 2022, reflecting significant recovery in economic output and living standards. Real GDP growth rates were robust, with 5.6% growth recorded in 2021 and an even stronger 7.0% growth in 2022, driven by the resumption of economic activity and pent-up demand. Inflation increased to 8.1% in 2022, influenced by global supply chain disruptions and rising energy prices. Unemployment rates declined to 6.7% in 2021 and further to 6.2% in 2022, indicating improvements in the labor market. Government debt decreased to 123.9% of GDP in 2021 and 111.2% in 2022, reflecting fiscal consolidation efforts amid economic recovery. For the years 2023 and 2024, projections estimate continued economic growth and gradual normalization of macroeconomic indicators. GDP in PPP terms is forecasted to reach 490.6 billion US dollars in 2023 and 512.2 billion US dollars in 2024. Correspondingly, GDP per capita is projected to increase to 46,381.4 US dollars PPP in 2023 and 47,996.7 US dollars PPP in 2024, suggesting ongoing improvements in economic productivity and living standards. Real GDP growth is expected to moderate to 2.6% in 2023 and 1.9% in 2024, reflecting a return to more sustainable growth rates following the post-pandemic rebound. Inflation rates are anticipated to decline to 5.3% in 2023 and further to 2.7% in 2024, indicating easing price pressures. Unemployment rates are projected at 6.6% in 2023 and 6.5% in 2024, reflecting a stable labor market. Government debt is forecasted to decline further to 97.7% of GDP in 2023 and 94.9% in 2024, signaling improved fiscal health and debt sustainability. International Monetary Fund (IMF) staff estimates for the period from 2025 to 2030, presented in italics in official data sources, predict continued economic growth for Portugal. GDP in PPP terms is expected to rise from 536.1 billion US dollars in 2025 to 640.1 billion US dollars in 2030, representing sustained expansion over the medium term. GDP per capita is projected to increase from 50,037.2 US dollars PPP in 2025 to 60,444.4 US dollars PPP in 2030, indicating ongoing improvements in individual economic well-being. Real GDP growth rates for this period are forecasted to range between 1.5% and 2.0%, reflecting steady but moderate growth consistent with mature economies. Inflation rates are expected to remain low and stable, fluctuating between 1.9% and 2.1%, supporting price stability. Unemployment rates are projected to decline gradually from 6.4% in 2025 to 6.2% from 2027 onwards, suggesting continued labor market improvements. Government debt as a percentage of GDP is anticipated to decrease steadily from 91.8% in 2025 to 75.8% in 2030, indicating a path toward greater fiscal sustainability and reduced public indebtedness. Together, these data points provide a comprehensive overview of Portugal’s economic evolution from 1980 through the early 21st century and into the projected future, illustrating the country’s responses to domestic and global economic challenges, policy adjustments, and growth dynamics. The interplay of GDP growth, inflation, unemployment, and government debt over this period reflects the complex economic landscape Portugal has navigated and its prospects for continued development.

In 2022, Eurostat reported the distribution of General Government expenditure by main function in Portugal as a percentage of the country’s total government spending. Social Protection represented the largest share, accounting for 39.7% of total expenditure, reflecting the government’s commitment to social safety nets and welfare programs. Health expenditures followed at 16.2%, indicating significant investment in medical services and public health infrastructure. General Public Services constituted 13.0%, encompassing administrative and governance functions essential to the operation of the state. Economic Affairs absorbed 11.0% of total expenditure, covering a broad range of activities from agriculture to industrial development. Education accounted for 9.8%, demonstrating a substantial allocation toward human capital development. Public Order and Safety received 3.7%, supporting law enforcement and judicial systems. Recreation, Culture and Religion were allocated 2.1%, reflecting funding for cultural institutions and community activities. Defence and Environmental Protection each represented 1.7%, while Housing and Community Amenities comprised the smallest share at 1.2%, indicating relatively modest spending on housing and local infrastructure. When these figures were compared to the Eurozone averages for the same year, Portugal’s expenditure pattern revealed both similarities and divergences. Social Protection in the Eurozone averaged 39.8%, closely mirroring Portugal’s 39.7%, suggesting comparable prioritization of social welfare across the region. Health spending in the Eurozone stood at 14.9%, slightly lower than Portugal’s 16.2%, indicating a relatively higher national focus on healthcare services. General Public Services averaged 12.1% in the Eurozone, somewhat less than Portugal’s 13.0%, pointing to a marginally larger administrative expenditure in Portugal. Economic Affairs took up 11.5% of Eurozone expenditure, slightly exceeding Portugal’s 11.0%, while Education averaged 9.2%, just below Portugal’s 9.8%, reflecting Portugal’s relatively greater investment in education. Public Order and Safety averaged 3.4%, less than Portugal’s 3.7%, and Recreation, Culture and Religion were at 2.2%, marginally higher than Portugal’s 2.1%. Defence spending in the Eurozone was 2.5%, notably above Portugal’s 1.7%, while Environmental Protection matched Portugal’s 1.7%. Housing and Community Amenities accounted for 2.0% in the Eurozone, exceeding Portugal’s 1.2%, suggesting lower relative investment in housing and community services within Portugal. Extending the comparison to the broader European Union (EU) averages, the expenditure pattern exhibited subtle differences. Social Protection expenditure across the EU averaged 39.3%, closely aligned with Portugal’s 39.7%. Health spending was 15.5% across the EU, slightly less than Portugal’s 16.2%, indicating a generally strong emphasis on healthcare throughout the Union. General Public Services constituted 12.0% of EU government expenditure, just below Portugal’s 13.0%. Economic Affairs accounted for 11.8% in the EU, marginally higher than Portugal’s 11.0%. Education expenditure averaged 9.5%, somewhat less than Portugal’s 9.8%, reflecting a consistent prioritization of education across member states. Public Order and Safety stood at 3.4%, Recreation, Culture and Religion at 2.3%, Defence at 2.6%, Environmental Protection at 1.6%, and Housing and Community Amenities at 2.0%, all figures that were generally close to but slightly higher than Portugal’s corresponding percentages, except for Defence and Environmental Protection where Portugal’s spending was notably lower or equal. Eurostat also provided data on General Government expenditure by three main functions as a percentage of Gross Domestic Product (GDP) for 2022, offering insight into the scale of public spending relative to the size of the economy. Portugal allocated 17.5% of its GDP to Social Protection, demonstrating a substantial fiscal commitment to social welfare programs. Health expenditures represented 7.1% of GDP, reflecting significant investment in medical and public health services. General Public Services absorbed 5.7% of GDP, underscoring the cost of governance and administrative functions. These figures were contrasted with the Eurozone averages, where Social Protection accounted for 20.0% of GDP, Health for 7.9%, and General Public Services for 6.1%, indicating that Portugal’s relative spending in these key areas was somewhat lower than the broader Eurozone average. Within the EU, Social Protection expenditure averaged 19.4% of GDP, Health 7.6%, and General Public Services 5.9%, again slightly exceeding Portugal’s levels, suggesting that Portugal’s public spending in these domains was modest compared to the wider European context. The Social Protection function, which constituted the largest share of government expenditure, encompassed a wide range of social welfare programs. This included expenditures on sickness and disability benefits, old age pensions, survivors’ benefits, family and children support, unemployment benefits, housing assistance, research and development (R&D) related to social protection, measures aimed at combating social exclusion, and other unspecified social protection items. This broad scope reflected the government’s comprehensive approach to social risk coverage, aiming to provide financial security and social support across diverse vulnerable groups within the population. General Public Services covered a variety of administrative and governance activities essential for the functioning of the state. These expenditures included the costs associated with executive and legislative organs, financial and fiscal affairs, external affairs such as diplomacy, foreign economic aid, and basic research. Additionally, R&D related to general public services was included, as well as public debt services, which involved interest payments on government debt. Transfers between different government levels, such as from central to regional or local authorities, were also part of this function, highlighting the complexity and breadth of government operations funded under this category. Economic Affairs encompassed a wide range of sectors critical to economic development and infrastructure. This function included general economic, labor, and commercial affairs, as well as specific sectors such as agriculture, forestry, fishing, and hunting. It also covered fuel and energy, mining, manufacturing, and construction industries, reflecting investment in both primary and secondary economic activities. Transport and communication sectors were included, along with other industries and related R&D activities, underscoring the government’s role in supporting economic growth and innovation across multiple domains. Health expenditures covered a comprehensive array of medical and public health services. This included spending on medical products, appliances, and equipment necessary for healthcare delivery. Outpatient services, which involve medical care without hospital admission, were a significant component, as were hospital and public health services more broadly. R&D related to health was also incorporated, reflecting investment in medical research and innovations aimed at improving healthcare outcomes. Education spending was allocated across all levels of formal education, including pre-primary, primary, secondary, and tertiary education. Post-secondary non-tertiary education was also funded, alongside education not definable by level, which may include adult education and other non-traditional educational activities. Subsidiary services to education, such as school transportation and meal programs, were included, as well as R&D related to education, highlighting efforts to improve educational methodologies and outcomes through research. Public Order and Safety expenditures supported essential services aimed at maintaining law and order. This function covered police services, fire-protection services, law courts, and prisons, ensuring the enforcement of laws and the administration of justice. R&D related to public order and safety was also included, reflecting efforts to enhance the effectiveness and efficiency of these services through innovation. Defence expenditures involved both military and civil defense activities, including the maintenance and operation of armed forces and civil protection mechanisms. Foreign military aid was part of this category, as was R&D related to defense, emphasizing investment in military technology and strategic capabilities. Recreation, Culture and Religion expenditures supported a variety of community and cultural activities. This included recreational and sporting activities, cultural services such as museums and theaters, broadcasting and publishing services, and religious and other community services. R&D in this area was also funded, aiming to promote cultural development and community engagement. Housing and Community Amenities expenditures covered housing development initiatives, community development projects, water supply infrastructure, street lighting, and related R&D. These investments were aimed at improving living conditions and the quality of local infrastructure. Environmental Protection expenditures focused on waste and water waste management, pollution abatement measures, protection of biodiversity and landscapes, and related R&D. This function highlighted the government’s commitment to environmental sustainability and the preservation of natural resources. In 2022, Portugal did not exhibit overspending on social risk coverage functions such as Social Protection and Health, indicating a balanced approach to these critical areas. The government’s expenditure in these domains aligned closely with European averages, suggesting prudent fiscal management in social welfare and healthcare. The slightly elevated spending on Education in Portugal was attributed to deliberate efforts to close the qualification gap between Portuguese citizens and their European counterparts. This strategic focus aimed to enhance educational attainment and workforce skills to support economic development. Significant progress in education was evidenced by the dramatic reduction in the school dropout rate, which fell from 43.6% in 2000 to 8.0% in 2023. This improvement marked a substantial transformation in educational outcomes, with Portugal moving from having one of the highest dropout rates in Europe in 2000 to ranking 13th in 2023, below the EU average. This achievement reflected the success of policies and investments targeting increased school retention and educational quality. However, potential overspending was identified in the General Public Services function, particularly related to employee compensations and consumption expenditures. These costs were notably high in legislative and executive organs, financial and fiscal affairs, and external affairs, suggesting inefficiencies or excesses in administrative spending. Such elevated costs raised concerns about the sustainability and efficiency of public administration expenditures. Within the Economic Affairs function, some sub-functions demonstrated probable overspending, especially due to intensive public works projects. Notably, investments focused on new motorways were highlighted as having limited multiplier effects on the economy, implying that the returns on these infrastructure expenditures were lower than expected. This raised questions about the prioritization and economic impact of certain capital projects within the sector. Public Order and Safety and Defence functions also exhibited higher compensations to employees and consumption expenditures compared to the EU average. Despite this increased spending, Portugal’s role in international conflicts remained minimal, and the domestic crime rate was moderate, suggesting that the elevated expenditures did not directly correspond to heightened security threats or military engagements. This discrepancy prompted debate about the justification and efficiency of spending in these areas. The purchase of two submarines sparked controversy regarding the necessity and justification of such defense expenditures. Critics questioned whether such acquisitions aligned with Portugal’s strategic defense needs, given the country’s limited involvement in international military conflicts and the relatively modest size of its armed forces. This procurement highlighted tensions between defense modernization efforts and fiscal prudence. Within the Health function, expenditures on outpatient services were significantly higher than the EU average, reflecting a strong emphasis on ambulatory care and preventive services. This contrasted with data from 2011, when hospital inpatient service expenses were reported to be very low, indicating a shift in healthcare resource allocation toward outpatient care. This transition aligned with broader European trends favoring less invasive and more cost-effective healthcare delivery models. Controlling fiscal deficits has historically been challenging for Portugal, partly due to interest payments on state loans. Interest payments remained stable at around 3.0% of GDP until 2010 but surged to 4.2% in 2011, exacerbating fiscal pressures. This increase in debt servicing costs constrained the government’s budgetary flexibility and underscored the importance of prudent fiscal management to ensure long-term economic stability.

In 1968, the number of public employees in Portugal stood at 196,755, establishing a baseline for subsequent analyses of public sector employment trends. Over the following decade, this figure experienced substantial growth, nearly doubling by 1979, when the public workforce reached 383,103 employees. This represented an increase of 94.7% compared to the 1968 baseline, reflecting significant expansion in public sector employment during this period. The upward trajectory persisted into the early 1980s; by 1983, the number of public employees had risen further to 435,795, marking a 13.8% increase from 1979. This continued growth illustrated the expanding role of the public sector in Portugal’s economy and governance during the post-revolutionary period. The trend of increasing public employment extended into the mid-1980s. By 1986, the public workforce had grown to 464,321, a 6.5% rise from 1983. However, it is important to note that the 1986 data, derived from internal survey estimates, excluded military and militarized personnel as well as public employees located in the autonomous regions of the Azores and Madeira islands. This exclusion was consistent with the methodological approach taken in subsequent years, reflecting the challenges of comprehensive data collection across all sectors and regions. Two years later, in 1988, the number of public employees increased to 485,368, representing a 4.5% rise from 1986, with the same exclusions applying. This steady growth during the late 1980s indicated continued public sector expansion despite the selective scope of the data. By 1991, the public employee population had reached 509,732, marking a 5.0% increase from 1988. Similar to previous years, these figures excluded military and militarized personnel and public employees in the Azores and Madeira, based on internal survey data. The early 1990s thus continued to see moderate growth in public employment, reflecting ongoing governmental functions and administrative needs. A more pronounced increase occurred by 1996, when the number of public employees was recorded at 614,256 as of 1 October. This represented a substantial 20.5% increase from 1991, indicating accelerated public sector growth during the mid-1990s. The choice of 1 October as the reference date for 1996 data, rather than the typical 31 December, was a notable exception in the series. The expansion of public employment persisted through the end of the decade. By 1999, the number of public employees had reached 701,911, a 14.3% increase from 1996. This continued upward trend underscored the increasing size and scope of Portugal’s public administration as the country consolidated its democratic institutions and integrated more fully into the European Union. The early 2000s saw a more modest pace of growth; in 2005, public employment was recorded at 731,485, representing a 4.2% increase from 1999. However, this period also marked the beginning of a gradual decline in public sector employment, as evidenced by a slight decrease to 726,523 employees in 2006, a 0.7% reduction from the previous year. This downward trend intensified in the subsequent years. In 2007, the number of public employees further declined to 708,507, a 2.5% decrease from 2006. The reduction continued in 2008, with public employment falling to 692,279, representing a 2.3% decrease from the previous year. This contraction persisted through 2009, when the public workforce numbered 675,048, a 2.5% decline from 2008. By 2010, the estimated number of public employees was 663,167, reflecting a 1.8% decrease from 2009. This 2010 figure was an estimate made in October 2010 for the preparation of the State Budget 2011, rather than a finalized year-end count. These consecutive declines during the late 2000s and early 2010s coincided with the global financial crisis and austerity measures implemented in Portugal, which affected public sector employment levels. In 2011, a notable reversal occurred, with public employment rising sharply to 727,785, a 9.7% increase from the 2010 estimate. This resurgence suggested a temporary expansion or stabilization of the public workforce amid ongoing economic challenges. However, this increase was followed by renewed reductions; in 2012, the number of public employees decreased to 699,901, a 3.8% decline from 2011. The downward trend continued in 2013, with public employment falling further to 674,927, a 3.6% decrease from 2012. In 2014, the number of public employees declined again to 656,376, marking a 2.7% reduction from the previous year. These successive decreases reflected ongoing fiscal consolidation efforts and public sector reforms aimed at reducing government expenditure. A slight recovery in public employment was observed in 2015, when the number of public employees increased marginally to 659,144, a 0.4% rise from 2014. This modest growth continued into 2016, with the public workforce reaching 664,168, a 0.8% increase from the prior year. The upward trend persisted in 2017, as public employment rose to 669,321, another 0.8% increase from 2016. This period of gradual growth suggested a stabilization of public sector employment following years of contraction. The rate of increase accelerated in 2018, with the number of public employees climbing to 683,165, a 2.1% rise from 2017. By 2019, the public workforce had expanded further to 699,031, representing a 2.3% increase from the previous year, indicating a sustained recovery in public employment levels. The growth in public sector employment continued into the early 2020s. In 2020, the number of public employees reached 718,940, reflecting a 2.8% increase from 2019. This upward momentum persisted in 2021, with public employment rising to 733,896, a 2.1% increase from 2020. The number of public employees further increased to 742,260 in 2022, a 1.1% rise from the previous year. By 2023, the public workforce totaled 745,406, representing a 0.4% increase from 2022. The most recent data for 2024 indicate that the number of public employees in Portugal reached 753,850, a 1.1% increase from 2023. Throughout this period, the data consistently refer to the number of public employees as of 31 December of the respective year, with the exception of 1996, for which the figure corresponds to 1 October. It is important to highlight that the data for the years 1986, 1988, and 1991 were derived from internal surveys and excluded military and militarized personnel as well as public employees in the Azores and Madeira islands. This methodological approach reflects the complexities involved in compiling comprehensive employment statistics across different sectors and regions within Portugal. Additionally, the 2010 figure was an estimate made in October 2010 for the preparation of the State Budget 2011, rather than a finalized count, underscoring the use of projections in public sector workforce planning. In 2019, public employment accounted for 13.7% of the total labor force in Portugal. This proportion is notably lower than the average for the Organisation for Economic Co-operation and Development (OECD) countries, where general government employment typically represents 17.9% of the labor force. This comparison indicates that, relative to other developed economies, Portugal maintains a smaller public sector workforce as a share of its total employment, reflecting national policy choices and economic structures.

In 2023, the Greater Lisbon region emerged as the most economically significant among Portugal’s NUTS II regions, registering a gross domestic product (GDP) of €84,363,398,000. This figure represented a substantial 31.6% share of the national GDP, underscoring the region’s dominant role in the Portuguese economy. The GDP per capita in Greater Lisbon stood at €39,942, which was notably high at 158.0% of the national average, reflecting the region’s concentration of economic activities, higher productivity levels, and a more diversified industrial and service sector. Greater Lisbon’s economic prominence is closely linked to its status as the capital region, hosting the country’s main financial institutions, multinational corporations, and a dense urban population that drives demand and innovation. Following closely, the North Region held the position of the second-largest contributor to Portugal’s GDP, with a total output of €78,659,537,000 in 2023. This accounted for 29.4% of the country’s overall economic production, making the North a critical engine of growth despite its lower GDP per capita relative to the national average. The region’s GDP per capita was €21,509, which corresponded to 85.1% of the Portuguese average, indicative of a more industrial and manufacturing-based economy that, while substantial in volume, generally yielded lower per capita income levels compared to the capital region. The North’s economy traditionally centers on textiles, footwear, and heavy industry, alongside emerging sectors such as technology and renewable energy, which have contributed to its steady economic output. The Centro Region contributed €36,631,120,000 to Portugal’s GDP in 2023, representing 13.7% of the national total. Its GDP per capita was €21,753, or 86.1% of the Portugal average, positioning it slightly above the North Region in terms of individual economic output. Centro’s economy is characterized by a blend of traditional manufacturing, agriculture, and growing service sectors, with notable strengths in ceramics, paper production, and tourism. The region’s geographic diversity, encompassing both coastal and inland areas, supports a mixed economic structure that balances industrial activity with rural economic contributions. The West and Tagus Valley region generated €16,560,191,000 in GDP during 2023, accounting for 6.2% of Portugal’s total economic output. This region’s GDP per capita was €19,603, equivalent to 77.6% of the national average, reflecting a moderate level of economic development relative to other regions. The West and Tagus Valley’s economy is influenced by a combination of agricultural activities, small and medium-sized enterprises, and emerging industrial zones. Its proximity to Lisbon facilitates economic linkages, although it remains less economically developed compared to the capital region and the North. In 2023, the Setúbal Peninsula produced a GDP of €14,154,110,000, which represented 5.3% of Portugal’s overall GDP. The region’s GDP per capita was €17,069, corresponding to 67.5% of the national average, marking it as one of the lower-income regions in terms of per capita output. The Setúbal Peninsula’s economy has traditionally been anchored in heavy industry, including shipbuilding, steel production, and chemical manufacturing, sectors that have faced structural challenges and transformations in recent decades. Despite these challenges, the region continues to play a vital role in the national economy due to its industrial base and port facilities. The Algarve Region contributed €13,143,033,000 to Portugal’s GDP in 2023, which accounted for 4.9% of the national total. Its GDP per capita was €27,303, or 108.0% of the Portuguese average, reflecting a relatively high level of economic output per resident. The Algarve’s economy is heavily reliant on tourism, which drives significant seasonal and service sector activity. The region’s favorable climate, extensive coastline, and well-developed hospitality infrastructure attract millions of visitors annually, generating substantial income and employment opportunities. This tourism-driven economic model has enabled the Algarve to maintain a GDP per capita above the national average despite its smaller population size. The Alentejo Region contributed €11,326,559,000 to Portugal’s GDP in 2023, representing 4.2% of the total. Its GDP per capita was €23,910, equivalent to 94.6% of the national average, indicating a moderate economic performance relative to other regions. Alentejo’s economy is predominantly based on agriculture, forestry, and agro-industry, with significant production of cork, wine, and olive oil. The region’s low population density and rural character have historically limited industrial development, but recent investments in renewable energy and tourism have begun to diversify its economic base. The Autonomous Region of Madeira recorded a GDP of €6,988,630,000 in 2023, accounting for 2.6% of Portugal’s total economic output. Madeira’s GDP per capita was €27,369, which was 108.3% of the national average, positioning it among the higher-income regions in Portugal. The island’s economy is largely driven by tourism, which capitalizes on Madeira’s subtropical climate and natural landscapes. Additionally, Madeira benefits from a strategic location in the Atlantic that supports maritime services and trade. The region’s economic structure also includes agriculture and light manufacturing, but tourism remains the primary economic pillar. The Autonomous Region of the Azores contributed €5,376,008,000 to Portugal’s GDP in 2023, representing 2.0% of the national total. Its GDP per capita was €22,346, or 88.4% of the national average, reflecting a somewhat lower but still substantial level of economic activity per resident. The Azores’ economy is characterized by agriculture, dairy farming, fisheries, and increasingly, tourism. The islands’ remote location and dispersed population have historically posed challenges to economic development, but recent efforts to improve infrastructure and promote sustainable tourism have enhanced economic prospects. Overall, Portugal’s total GDP in 2023 was €267,384,332,000, with a national average GDP per capita of €25,277. This figure serves as the baseline, set at 100.0%, for comparative purposes across the various regions. The distribution of GDP and GDP per capita across the NUTS II regions highlights significant regional disparities, with Greater Lisbon and the Autonomous Regions of Madeira and the Algarve exhibiting above-average per capita economic output, while regions such as the Setúbal Peninsula and West and Tagus Valley fall below the national average. These variations reflect differing economic structures, levels of industrialization, urbanization, and sectoral specialization that shape the regional economies within Portugal.

In the fourth quarter of 2024, Portugal’s unemployment rate stood at 6.7%, reflecting a significant improvement from the peak levels experienced earlier in the decade. This decline in unemployment marked the continuation of a positive trend that had been underway since the end of 2013, effectively reversing the persistent upward trajectory observed throughout the 2000s. The earlier negative trend in unemployment had been severely exacerbated by the global financial crisis of 2008, which led to a dramatic increase in joblessness, culminating in a record unemployment rate of 17.7% in early 2013. This peak represented the highest level of unemployment Portugal had faced in recent history, highlighting the severe economic challenges the country endured during that period. The subsequent reduction in unemployment was closely linked to a broader expansion of the Portuguese economy that began in the third quarter of 2014. This economic recovery followed several years of contraction in 2011, 2012, and 2013, during which Portugal’s GDP had shrunk due to austerity measures and the lingering effects of the financial crisis. The revival of economic growth was evidenced by a yearly GDP growth rate of 1.5% recorded in the second quarter of 2015, which played a crucial role in improving employment figures across various sectors. This period of growth facilitated the creation of new jobs and helped absorb some of the unemployed workforce back into the labor market. Emigration emerged as a significant factor contributing to the decrease in unemployment during this time. In 2013, for instance, the labor force in Portugal shrank by 1.6% during the first nine months of the year, largely due to a substantial number of Portuguese citizens moving abroad in search of work opportunities. This outflow of workers, many of whom were young and qualified, alleviated some of the pressure on the domestic labor market by reducing the number of individuals actively seeking employment within the country. The emigration trend was closely tied to the broader economic challenges Portugal faced during the Troika bailout program, which began in 2011 and coincided with austerity measures and high unemployment. Additional factors influencing the decline in unemployment included methodological considerations by Statistics Portugal. The national statistical institute’s approach excluded individuals engaged in internships or professional training from the unemployed category, which had the effect of lowering the official unemployment figures. This classification reflected the reality that many individuals were participating in programs designed to enhance their skills and employability, even though they were not formally employed. Furthermore, the prior period of substantial job losses had been followed by growth in key sectors such as tourism and agriculture, both of which experienced revivals that generated numerous employment opportunities. The tourism sector, in particular, benefited from increased international arrivals and investment, while the agricultural sector’s resurgence created jobs in rural areas, contributing to the overall reduction in unemployment. Despite these positive developments, Portugal remained the Western European country with the lowest GDP per capita, underscoring ongoing economic challenges despite its status as a developed and high-income nation. According to Eurostat data from 2018, Portugal ranked ninth lowest in purchasing power among the 27 European Union member states, indicating that the average income and living standards were comparatively modest relative to other EU countries. This disparity highlighted structural issues in the Portuguese economy, including productivity levels and wage growth, which continued to affect the quality of life for many workers. Maria da Conceição Cerdeira, co-author of a research study conducted by the Lisbon School of Economics and Management (ISEG), observed that Portuguese workers generally experienced lower work intensity and psychological pressure compared to their counterparts in Northern Europe and North America. This lower level of work-related stress was attributed to cultural and economic factors that shaped the Portuguese labor market and workplace environment. However, the reduced psychological pressure did not necessarily translate into better overall job quality. A European survey conducted in 2007, which informed a 2009 study, ranked Portugal as the fifth European country with the lowest quality of work. This ranking reflected issues such as job insecurity, low wages, limited career progression, and inadequate working conditions that persisted in the Portuguese labor market. Further insights into the challenges faced by the Portuguese workforce were provided by a Harvard Business School study that compared managerial quality across nine European Union member countries. The study found that Portugal had the second worst managers among the countries analyzed, ranking just above Greece but below Ireland, Poland, Italy, the United Kingdom, France, Germany, and Sweden. This finding highlighted deficiencies in management practices and leadership within Portuguese firms, which potentially hindered productivity and employee satisfaction. The severity of the unemployment crisis in Portugal was underscored by data from the first quarter of 2013, when the unemployment rate reached a new record high of 17.8%, up from 16.9% in the previous quarter. Government forecasts at the time predicted that the unemployment rate could rise further to 18.5% in 2014, reflecting deep concerns about the labor market’s capacity to absorb unemployed workers. The persistence of such high unemployment rates was a central challenge for policymakers and contributed to social and economic pressures across the country. Since the onset of the Troika bailout program in 2011, approximately 300,000 to 360,000 people emigrated from Portugal, many of whom were qualified young individuals seeking better employment prospects abroad. This significant emigration wave was a direct response to the lack of job opportunities and economic uncertainty within Portugal, and it had profound implications for the country’s demographic composition and labor market dynamics. The departure of a substantial portion of the young and educated workforce represented both a loss of human capital and a factor that temporarily eased unemployment pressures domestically. In 2014, the unemployment rate declined to 13.9%, accompanied by the creation of around 70,000 new jobs during the year. This job growth was a positive indicator of the labor market’s gradual recovery and reflected the broader economic expansion underway. However, this improvement was tempered by the fact that approximately 59,000 people became unavailable for work during the same period, either due to prolonged unemployment or emigration. This group was effectively removed from the active labor force, which had implications for labor market participation rates and the interpretation of unemployment statistics. The issue of underemployment also remained a concern in 2014, with 251,700 part-time employees classified as under-employed because they wished to work more hours daily. This figure highlighted the prevalence of involuntary part-time work and the challenges faced by many workers in securing adequate working hours to meet their financial needs. Additionally, 240,300 individuals were categorized as inactive, meaning they were neither employed nor engaged in formal education or training. This segment of the population represented a pool of potential labor that was not currently contributing to economic activity or workforce development. The Portuguese Central Bank reported that one-third of the jobs created during this period were internships facilitated by the IEFP public institute. These internships were part of government initiatives aimed at improving employability and providing work experience, particularly for young people entering the labor market. While these positions contributed to the overall job creation figures, they also raised questions about the quality and sustainability of employment, as internships often involved limited remuneration and temporary contracts. The reliance on such programs reflected ongoing efforts to address structural issues in the labor market and to support the transition of workers from education to stable employment.

The minimum monthly wage in Portugal is scheduled to increase to 870 euros starting from January 1, 2025, marking a rise from the previous minimum wage level of 820 euros. This adjustment reflects the government’s ongoing commitment to improving the income levels of the lowest-paid workers in the country. The increase was formalized in December 2024 as part of a broader strategic plan aimed at gradually raising the minimum wage to at least 1,000 euros by the year 2028. This target underscores the Portuguese government’s recognition of the importance of ensuring a living wage that keeps pace with inflation, economic growth, and social equity. Since 2015, the minimum wage in Portugal has followed a consistent upward trajectory, beginning at 505 euros per month in that year. Over the course of the last decade, successive governments have implemented incremental increases to the minimum wage, reflecting both economic recovery efforts following the European debt crisis and a political consensus on the need to reduce wage inequality. The steady rise in the minimum wage has been seen as a critical factor in supporting domestic consumption, reducing poverty, and enhancing the overall quality of life for lower-income workers. This progression from 505 euros in 2015 to the projected 870 euros in 2025 represents a significant real-terms increase, illustrating Portugal’s commitment to improving labor market conditions. In parallel with the minimum wage developments, the average gross wage in Portugal currently stands at approximately 1,525 euros per month, which is roughly equivalent to 1,648 US dollars. This average wage level places Portugal on a comparable footing with other Central and Eastern European countries such as the Czech Republic and Estonia, countries that have experienced similar economic transformations and wage growth patterns within the European Union. The average net wage, which accounts for deductions such as income tax and social security contributions, is approximately 1,270 euros, or about 1,372 US dollars. These figures provide a more accurate reflection of the disposable income available to Portuguese workers and are critical for assessing living standards and purchasing power within the country. Wages in Portugal are structured to be paid fourteen times annually, a system that differs from the twelve-month payment schedule common in many other countries. This payment scheme includes the standard twelve monthly salary payments, supplemented by two additional payments: one as a Christmas bonus and another as a holiday bonus. These extra payments are legally mandated and are intended to provide workers with additional financial resources during key periods of the year, thereby supporting consumption and economic activity. The practice of paying wages fourteen times annually has deep historical roots in Portugal and remains an integral feature of the country’s labor market arrangements. The determination of the minimum wage in Portugal is governed by Article 273 of the Portuguese Labor Code, which establishes a framework for social dialogue and negotiation. According to this legal provision, the minimum wage is set through discussions within the Permanent Social Conciliation Commission, a tripartite body that includes representatives from the Government, Employers’ Confederations, and Trade Union Confederations. This institutional mechanism ensures that the setting of the minimum wage is a collective process that balances the interests of workers, employers, and the state. It also reflects Portugal’s broader commitment to social dialogue as a means of fostering industrial peace and promoting equitable economic policies. A detailed examination of the minimum and average monthly wages (after income taxes) for employees working for others from 2015 to the first quarter of 2025 reveals a clear pattern of wage growth. In 2015, the minimum wage was 505 euros while the average wage stood at 834 euros. The following year, 2016, saw the minimum wage rise to 530 euros and the average wage to 846 euros. This upward trend continued in 2017 with the minimum wage reaching 557 euros and the average wage increasing to 865 euros. In 2018, the minimum wage was set at 580 euros, accompanied by an average wage of 896 euros. The year 2019 marked another increment with the minimum wage at 600 euros and the average wage at 912 euros. The momentum of wage increases persisted into the 2020s, with the minimum wage rising to 635 euros in 2020 and the average wage climbing to 968 euros. In 2021, the minimum wage was further increased to 665 euros, while the average wage surpassed the 1,000-euro mark, reaching 1,011 euros. The year 2022 saw the minimum wage rise to 705 euros, with the average wage slightly increasing to 1,019 euros. By 2023, the minimum wage had reached 760 euros and the average wage had grown to 1,054 euros. In 2024, the minimum wage was set at 820 euros, accompanied by a more substantial increase in the average wage to 1,184 euros. Finally, in the first quarter of 2025, the minimum wage rose to 870 euros, with the average wage reaching 1,203 euros. This data illustrates a consistent and steady improvement in wage levels over the decade, reflecting both macroeconomic growth and policy efforts aimed at enhancing worker compensation. The progressive increases in both minimum and average wages have had significant implications for the Portuguese economy and labor market. They have contributed to reducing income inequality and poverty rates, while also stimulating domestic demand through higher household consumption. At the same time, the wage growth has been carefully managed through social dialogue to avoid excessive inflationary pressures or negative impacts on employment. The structured approach to wage determination, involving government, employers, and trade unions, has played a crucial role in maintaining economic stability and social cohesion during periods of economic adjustment and recovery. Overall, the evolution of wages in Portugal over the past decade reflects a deliberate policy orientation towards improving labor market conditions and ensuring that wage growth aligns with broader economic and social objectives. The scheduled increase to 870 euros in 2025 and the strategic goal of reaching at least 1,000 euros by 2028 exemplify the country’s ongoing efforts to enhance the living standards of its workforce while maintaining competitiveness within the European Union. The fourteen-payment wage system, the legal framework governing wage negotiations, and the steady upward trend in both minimum and average wages collectively illustrate the complexity and dynamism of Portugal’s wage landscape.

In 2008, the unemployment rate among individuals holding a university degree in Portugal stood at approximately 8%, a figure that, while notable, did not fully capture the extent of difficulties faced by graduates in the labor market. A considerably larger segment of degree holders experienced underemployment, a condition characterized by employment in positions that did not fully utilize their academic qualifications or skills. This mismatch between the educational attainment of graduates and the demands of the job market underscored systemic issues within the Portuguese economy and higher education system. Many graduates found themselves employed in roles that required lower qualifications, reflecting a structural imbalance where the supply of highly educated individuals exceeded the availability of suitable employment opportunities. This phenomenon was indicative not only of economic challenges but also of a broader misalignment between the competencies acquired through higher education and the practical needs of employers. The high rates of graduate unemployment and underemployment were closely linked to a generalized lack of employability among recent graduates, which was compounded by inadequate preparation for the workplace during their academic training. This problem was pervasive across various courses and fields offered by certain higher education institutions or specific departments, where curricula often failed to equip students with the practical skills, work experience, and professional competencies demanded by the contemporary labor market. The disconnect between academic programs and employer expectations highlighted deficiencies in the design and delivery of higher education, including insufficient integration of vocational training, internships, and industry partnerships. As a result, many graduates emerged from their studies without the necessary tools to compete effectively for quality employment, contributing to persistent underutilization of human capital within the Portuguese economy. In response to these challenges, Portugal undertook significant educational reforms aimed at enhancing the quality and relevance of higher education. Central to these efforts was the implementation of the Bologna Process, a European-wide initiative designed to harmonize degree structures, improve academic standards, and facilitate student mobility across member countries. Alongside this, Portuguese authorities enforced the compulsory closure of numerous courses, departments, colleges, and private universities following 2005. These closures were motivated by widespread concerns regarding insufficient academic rigor and low teaching standards that had characterized many programs and institutions. The reform measures sought to eliminate substandard offerings, reduce fragmentation within the higher education sector, and concentrate resources on institutions and programs capable of delivering higher-quality education aligned with labor market needs. This restructuring was part of a broader strategy to restore credibility to Portuguese higher education and improve graduate outcomes in terms of employability. In 2007, the Portuguese government intensified its oversight of higher education quality through investigations conducted by state agencies into several major private universities. These inquiries revealed significant deficiencies in academic standards and institutional governance, prompting the immediate closure of two private universities deemed incapable of meeting required quality benchmarks. This decisive action reflected a governmental commitment to enforcing accountability within the higher education sector and safeguarding the interests of students and employers alike. The closures served as a warning to other institutions and underscored the necessity of maintaining rigorous academic standards to ensure that degrees awarded carried genuine value in the labor market. By targeting private universities, which had expanded rapidly in previous decades with varying degrees of regulation, the government aimed to curb the proliferation of low-quality educational providers. Simultaneously, the public higher education system underwent a process of program rationalization, with multiple degree courses discontinued due to poor quality, low student demand, or limited interest from potential employers. This pruning of academic offerings was part of a strategic effort to realign the supply of graduates with the evolving needs of the Portuguese economy. Degree programs that failed to attract sufficient numbers of students or lacked clear pathways to employment were phased out, allowing institutions to focus on areas with stronger labor market relevance and higher academic standards. This restructuring also sought to optimize the allocation of public resources within the higher education sector, ensuring that funding supported programs with demonstrable value and sustainability. The process reflected an acknowledgment that academic diversity alone was insufficient if not accompanied by responsiveness to economic realities and employment prospects. Beyond higher education, reforms extended to secondary and post-secondary non-higher education sectors, particularly in intermediate education (ensino médio), which encompasses technical and vocational training. Since 2007, these educational levels experienced redevelopment under the policies of the XVII Constitutional Government, led by Prime Minister José Sócrates. The government prioritized enhancing workforce readiness by modernizing curricula, improving the quality and relevance of vocational programs, and strengthening links between education and industry. These initiatives aimed to provide alternative pathways to employment for young people not pursuing university degrees, addressing skills shortages in key sectors and reducing youth unemployment. By investing in technical and vocational education, policymakers sought to diversify the educational landscape and better prepare graduates for the practical demands of the labor market, thereby contributing to broader economic development goals. Despite these reform efforts, the labor market situation for young graduates remained precarious. By March 2014, the graduate unemployment rate among Portuguese youth aged 15 to 24 had risen to over 35.4%, marking an increase compared to the rates recorded in January and February of the same year. This upward trend highlighted the persistence and intensification of employment challenges facing recent graduates amid a fragile economic environment. The high unemployment rate among young degree holders reflected ongoing structural weaknesses in the economy, including limited job creation, sectoral imbalances, and the lingering effects of the global financial crisis. The data underscored the difficulties encountered by young people in transitioning from education to stable, well-paid employment, with implications for social cohesion and economic growth. In light of the fragile economic situation and uncertain future prospects, a significant proportion of Portuguese youth expressed intentions to seek opportunities abroad. Surveys conducted during this period revealed that 57% of young people in Portugal intended to emigrate to other countries, driven by concerns over domestic job availability, economic stability, and career advancement. This widespread inclination toward emigration represented a critical challenge for the Portuguese economy, as it risked exacerbating brain drain and depleting the country’s human capital. The phenomenon reflected not only economic factors but also broader issues related to social mobility, quality of life, and confidence in national institutions. The high level of emigration intent among youth highlighted the urgency of addressing structural labor market problems and creating conditions conducive to retaining and attracting talent within Portugal.

Poverty and inequality have long been persistent social challenges in Portugal, prompting the government and various institutions to implement a range of social policy measures aimed at their mitigation. These policies have sought not only to alleviate immediate financial hardship but also to address structural disparities that contribute to unequal income distribution and social exclusion. Over time, the Portuguese state has developed mechanisms to provide social protection and promote economic inclusion, recognizing that poverty and inequality undermine social cohesion and economic development. The European economic crisis, which began in the late 2000s, had a pronounced impact on the socioeconomic landscape of Portugal, significantly increasing the number of households living below the poverty line. This period of economic downturn was marked by austerity measures, rising unemployment, and fiscal constraints that disproportionately affected vulnerable populations. Among these, the youth demographic emerged as the most severely impacted group, as high unemployment rates among young people curtailed their earning potential and prospects for economic independence. The crisis exacerbated pre-existing social inequalities and underscored the need for targeted interventions to support those at risk of poverty. The global economic crisis is widely identified as the primary driver behind the widening income inequalities observed in Portugal during this period. The resulting disparities in income distribution had broader macroeconomic consequences, as diminished purchasing power among lower-income groups led to depressed market demand. This contraction in consumer spending, in turn, hampered overall economic growth, creating a feedback loop that further entrenched poverty and inequality. Policymakers recognized that addressing income inequality was not only a matter of social justice but also essential for revitalizing the national economy. Portugal’s minimum wage policy has been a central tool in efforts to reduce extreme poverty and income inequality. By setting a legally mandated wage floor, the policy aims to ensure that workers receive a baseline level of income sufficient to meet basic living standards. This approach is intended to stimulate domestic demand by increasing the disposable income of low-wage earners, thereby promoting consumption and supporting economic activity. Furthermore, a stable and adequately set minimum wage contributes to long-term economic stability by reducing income disparities and fostering social inclusion. After a period of economic austerity and a four-year freeze on wage adjustments, Portugal increased its minimum wage by 4% in 2014. This decision followed extensive negotiations between labor organizations and employers, reflecting a consensus that wage growth was necessary to support workers’ livelihoods and stimulate economic recovery. The increase was carefully calibrated to balance the interests of employees and employers, aiming to enhance purchasing power without imposing undue burdens on businesses still recovering from the crisis. The feasibility of the 2014 minimum wage increase was largely contingent upon the substantial economic recovery Portugal experienced in the preceding years. As economic indicators improved and fiscal stability was restored, the government and social partners found the conditions suitable for raising the minimum wage. This policy move was intended not only to improve the living standards of low-income workers but also to enhance the sustainability of the Portuguese economy by fostering a more equitable distribution of income. The increase sought to reduce poverty levels while supporting consumer demand and encouraging broader economic participation. In addition to wage policy, Portugal employs a system of taxes and transfer payments designed to promote income equality between high-income and low-income earners. This fiscal framework relies on progressive taxation and targeted social benefits to redistribute resources and mitigate disparities in wealth and income. Through these mechanisms, the government aims to create a more balanced economic environment that supports social welfare and reduces the risk of poverty. Income taxes in Portugal are characterized by significant progressive features, ensuring that individuals with higher incomes contribute a substantially larger share of their earnings in taxes compared to those with lower incomes. This progressive structure is designed to achieve redistribution by levying higher tax rates on wealthier taxpayers, thereby generating revenue that can be used to fund social programs and public services. The graduated tax brackets reflect a commitment to equity and social justice within the fiscal system. High-income earners in Portugal pay approximately three times the amount of taxes compared to low-income earners, a disparity that plays a critical role in facilitating income redistribution and reducing inequality. This differential tax burden helps to narrow the income gap by transferring resources from those with greater financial means to support social safety nets and public investments that benefit the broader population. The progressive tax policy thus serves as an essential instrument in the country’s poverty prevention strategy. By enabling low-income earners to retain a larger proportion of their income, the progressive tax policy enhances their purchasing power, which in turn stimulates demand for goods and services within the national economy. Increased consumption among lower-income groups contributes to economic dynamism by supporting businesses and encouraging investment. This virtuous cycle underscores the interconnectedness of social equity and economic vitality in Portugal’s policy framework. A cornerstone of Portugal’s social protection system is the Guaranteed Minimum Income (GMI), established by Act no. 19-A/96 on 29 June 1996. The GMI is a means-tested social policy designed to ensure that all Portuguese citizens have access to a minimum level of income and financial stability. By providing a safety net for those whose earnings fall below a defined threshold, the GMI aims to prevent extreme poverty and promote social inclusion. The GMI is regarded as a right for Portuguese people and is deliberately structured to be independent of market fluctuations. This design ensures that beneficiaries receive consistent support regardless of economic cycles, thereby offering a stable foundation for financial security. The policy reflects a commitment to social solidarity and the recognition of income security as a fundamental component of citizenship. Targeting low-income earners aged over 18, the GMI program provides recipients with social and economic autonomy, encouraging their active participation in Portugal’s economic growth. By alleviating financial hardship, the GMI enables beneficiaries to engage more fully in education, employment, and community life. This empowerment approach aligns with broader goals of fostering human capital development and reducing long-term dependency on social assistance. A 2001 report on the GMI program revealed that 32% of beneficiaries who had previously been approved for the benefit were discontinued after their income rose above the minimum threshold. This finding demonstrated the policy’s effectiveness in facilitating upward economic mobility and reducing reliance on social transfers. The ability of recipients to exit the program as their financial situation improved highlights the GMI’s role in promoting sustainable poverty alleviation. Over the past decade, the measures associated with the GMI policy have been effective in eradicating poverty and enhancing income equality in Portugal. By providing targeted support to those most in need and integrating social protection with broader economic policies, the GMI has contributed to reducing social disparities and fostering a more inclusive society. Its success underscores the importance of comprehensive social policies in addressing the multifaceted challenges of poverty and inequality.

Portugal’s natural resource endowment includes a diverse range of mineral deposits that have historically contributed to its industrial development. Among these resources are iron ore (Fe), which has been fundamental in supporting the country’s steel industry and manufacturing sectors. Pyrite (PY), a sulfide mineral rich in iron and sulfur, has also been extensively mined, particularly for its use in sulfuric acid production and other chemical processes. Additionally, Portugal possesses deposits of tin (Sn), a metal valued for its applications in soldering and alloy production. The country is notable for its tungsten (W) reserves, a strategic metal critical for hardening steel and manufacturing cutting tools, which has attracted considerable industrial interest. Uranium (U) deposits have been identified and exploited to a limited extent, reflecting Portugal’s engagement with nuclear materials. Furthermore, coal (C) and lignite (L) deposits have historically played a role in the nation’s energy production, although their significance has diminished over time due to shifts toward alternative energy sources and environmental considerations. Together, these natural resources have shaped Portugal’s industrial landscape and continue to influence its economic activities. The tertiary sector has emerged as the most significant component of Portugal’s contemporary economy, reflecting a broader global trend toward service-oriented economic structures. This sector accounts for a substantial 75.8% of the country’s gross value added (GVA), underscoring its dominant role in generating economic output. The prominence of the tertiary sector encompasses a wide array of services, including finance, tourism, retail, education, healthcare, and public administration, all of which contribute to the sector’s expansive share of the economy. The growth of tourism, in particular, has been a driving force behind the expansion of services, capitalizing on Portugal’s rich cultural heritage, favorable climate, and coastal attractions. Financial services have also developed robustly, supported by the modernization of banking and insurance industries. This shift toward a service-based economy has facilitated increased urbanization and the development of infrastructure tailored to meet the demands of a growing tertiary sector. Employment patterns in Portugal closely mirror the economic weight of the tertiary sector, with 68.1% of the working population engaged in service-related occupations. This high level of employment within the tertiary sector highlights its central role not only in economic output but also in providing livelihoods for the majority of Portuguese workers. The sector’s employment dominance reflects the diversification of service industries, ranging from traditional retail and hospitality jobs to emerging roles in information technology and professional services. The expansion of the tertiary sector has also been accompanied by changes in labor market dynamics, including shifts in skill requirements and the growth of urban employment centers. Consequently, the service sector’s capacity to absorb labor has been a critical factor in Portugal’s economic development and social transformation. Following the tertiary sector, the industry sector holds the position of the second most important economic domain in Portugal, contributing 21.9% to the gross value added. This sector encompasses manufacturing, construction, mining, and utilities, playing a vital role in the production of goods and infrastructure development. Key industries within this sector include textiles, footwear, automotive components, chemicals, and food processing, which have historically been pillars of Portugal’s industrial economy. The industrial sector’s contribution to GVA reflects ongoing efforts to modernize production processes, enhance competitiveness, and integrate into global value chains. Investments in technology and innovation have been instrumental in sustaining industrial output, despite challenges posed by international competition and economic fluctuations. In terms of employment, the industry sector provides jobs for 24.5% of Portugal’s workforce, making it a significant employer alongside the dominant tertiary sector. This substantial share of industrial employment underscores the sector’s importance in offering diverse job opportunities, ranging from skilled manufacturing positions to construction and mining roles. The industrial workforce has experienced transformations driven by automation, shifts in production techniques, and changes in global demand patterns. Nevertheless, the sector remains a critical source of stable employment, particularly in regions with established industrial bases. Efforts to balance industrial growth with environmental sustainability and labor market adaptability continue to shape the sector’s evolution. Historically, fisheries and agriculture were central to Portugal’s economy, collectively comprising approximately 25% of the economic output in 1960. During this period, these primary sectors were vital for domestic food production, export revenues, and rural employment. Agriculture included the cultivation of cereals, vegetables, fruits, and vineyards, while fisheries exploited Portugal’s extensive Atlantic coastline and rich marine biodiversity. The prominence of these sectors reflected Portugal’s traditional economic structure and the limited industrialization and urbanization of the mid-20th century. However, subsequent decades witnessed significant structural changes, including mechanization, rural-to-urban migration, and the expansion of industrial and service sectors, which collectively contributed to the decline of fisheries and agriculture in economic terms. Currently, the combined contribution of fisheries and agriculture to Portugal’s gross value added has diminished markedly, representing only 2.4% of the total GVA. This substantial reduction reflects the relative decline of primary sector activities in the face of growing industrialization and the dominance of services. Factors such as increased competition from international agricultural producers, changes in consumer preferences, and environmental challenges have also influenced the contraction of these sectors. Despite their reduced share in economic output, fisheries and agriculture continue to play a role in regional economies, particularly in rural and coastal areas where traditional practices and local markets persist. Despite the diminished economic contribution of fisheries and agriculture, these sectors still provide employment for 7.5% of Portugal’s working population. This employment share indicates that a significant portion of the labor force remains engaged in primary sector activities, often in small-scale or family-run operations. The persistence of agricultural and fishing employment reflects cultural traditions, regional economic disparities, and the ongoing importance of these sectors for food security and local livelihoods. Government policies and European Union support mechanisms have aimed to sustain rural communities and promote sustainable practices within fisheries and agriculture. These efforts seek to balance economic viability with environmental conservation and social cohesion in areas dependent on primary sector employment.

Forests constitute the primary natural resource of Portugal, covering approximately 34 percent of the national territory and playing a vital role in the country’s ecological and economic landscape. This extensive forested area is characterized by a diversity of species adapted to the Mediterranean climate and varied topography. Among the predominant forest types, pine trees stand out as the most widespread, occupying an area of about 13,500 square kilometers. These pine forests are largely composed of maritime pine (Pinus pinaster), which has been extensively cultivated due to its fast growth and valuable timber. The maritime pine is utilized in the production of pulp, paper, and construction materials, making it a cornerstone of Portugal’s forestry industry. The adaptability of pine species to poor soils and their role in preventing soil erosion have further emphasized their importance in land management and conservation efforts. In addition to pine forests, cork oaks (Quercus suber) represent a significant and distinctive forest resource in Portugal, covering approximately 6,800 square kilometers. The cork oak is a species native to the western Mediterranean region and is particularly well-suited to Portugal’s climate and soil conditions. Cork harvesting is a sustainable practice in which the bark of the tree is carefully stripped without causing harm, allowing the tree to regenerate its protective layer over a period of about nine years. Portugal’s cork oak forests, known as montados, are not only economically valuable but also culturally and environmentally significant, supporting a unique biodiversity including endangered species such as the Iberian lynx and the Spanish imperial eagle. The cork industry in Portugal is globally renowned, with the country accounting for half of the world’s cork production. This dominant position in the global market has been maintained through centuries of traditional knowledge combined with modern processing techniques, making cork a major export product and a symbol of Portuguese natural heritage. Holm oaks (Quercus ilex) are another notable component of Portugal’s forested areas, covering around 5,340 square kilometers. These evergreen oaks are characteristic of the Mediterranean biome and are well-adapted to withstand dry summers and poor soils. Holm oak forests contribute to the diversity and resilience of Portugal’s woodlands, often forming mixed stands with cork oaks and pines. They provide valuable ecosystem services such as soil stabilization, carbon sequestration, and habitat for wildlife, while also being used for firewood, charcoal production, and acorn harvesting. The presence of holm oaks enhances the multifunctionality of Portuguese forests, blending economic utility with ecological sustainability. Eucalyptus forests, covering approximately 2,430 square kilometers, have become an increasingly prominent feature of Portugal’s forestry sector, particularly since the mid-20th century. The introduction of Eucalyptus globulus, commonly known as the blue gum, was driven by its rapid growth rate and high yield of pulpwood, which supports the country’s substantial paper and cellulose industries. While eucalyptus plantations have contributed significantly to economic development and job creation, their expansion has also sparked debates concerning environmental impacts such as biodiversity loss, increased fire risk, and water consumption. Despite these concerns, eucalyptus remains a key resource within Portugal’s forestry portfolio, reflecting the balance between economic priorities and environmental management challenges. Beyond its extensive forest resources, Portugal possesses important mining resources that contribute to its mineral wealth and industrial potential. Among these, lithium stands out as a critical element due to its increasing global demand for use in batteries, particularly in electric vehicles and renewable energy storage systems. Portugal is one of the few European countries with significant lithium deposits, primarily located in the northern region of the country. The extraction and processing of lithium have attracted considerable investment and are poised to play a strategic role in the country’s economic diversification and technological advancement. In addition to lithium, Portugal has historically exploited other valuable minerals such as tungsten, tin, and uranium. Tungsten, known for its hardness and high melting point, has been mined in Portugal since the early 20th century, with deposits mainly found in the Panasqueira mine. This mineral is essential for manufacturing hard metals and various industrial applications. Tin, another important resource, has also been extracted from Portuguese mines, contributing to the country’s metallurgical industry. Uranium mining, although less extensive, has been part of Portugal’s mineral sector, with deposits located in the central part of the country. The presence of these minerals underlines Portugal’s diverse geological endowment and its capacity to supply critical raw materials for both domestic use and export markets. The combination of extensive forest resources and significant mineral deposits positions Portugal as a country with a rich natural resource base that supports multiple sectors of the economy. The sustainable management of these resources remains a priority, balancing economic growth with environmental conservation and social responsibility. Portugal’s forests, particularly its cork oak landscapes, continue to be emblematic of its natural heritage, while its mineral wealth offers opportunities for innovation and industrial development in the context of a global transition towards sustainable technologies.

After enduring a prolonged period of decline, agriculture in Portugal experienced a notable resurgence that was largely triggered involuntarily by the Portuguese debt crisis. During this economic downturn, many highly qualified individuals who had previously been employed in the tertiary sector lost their jobs due to widespread austerity measures and economic contraction. Faced with limited employment opportunities in their traditional fields, a significant number of these displaced professionals turned to developing agricultural businesses, often despite having limited or no prior experience in farming or related activities. This unexpected influx of new entrants into the agricultural sector contributed to a revitalization of rural economies and agricultural production, as innovative approaches and renewed investment began to reshape the landscape of Portuguese agriculture. Despite the relatively small contribution of agriculture to Portugal’s overall economy in terms of gross domestic product, a substantial portion of continental Portugal’s land area remains devoted to agricultural activities. The extensive use of land for farming reflects the country’s historical and cultural ties to agriculture, as well as the suitability of its varied climate and terrain for diverse types of crop cultivation. The persistence of agricultural land use underscores the sector’s continued importance in rural livelihoods and regional economies, even as Portugal’s economy has shifted increasingly toward services and industry in recent decades. Geographically, the southern region of Portugal has developed extensive monocultures, with large areas primarily dedicated to the cultivation of cereals and olive trees. This pattern of land use is influenced by the Mediterranean climate prevalent in the south, characterized by hot, dry summers and mild, wet winters, which favors the growth of these crops. In contrast, the Douro Valley, located in the northern part of the country, is predominantly dedicated to vineyards. The Douro region’s unique topography, with steep terraced slopes along the Douro River, combined with its specific microclimate, provides ideal conditions for viticulture. This specialization has made the Douro Valley synonymous with high-quality wine production, particularly for fortified wines such as Port. Key agricultural land uses in Portugal are quantitatively significant, with olive trees covering approximately 4,000 square kilometers (1,545 square miles), making olives one of the most widespread crops in the country. Vineyards span about 3,750 square kilometers (1,450 square miles), reflecting the importance of wine production both for domestic consumption and export. Wheat is cultivated on roughly 3,000 square kilometers (1,160 square miles), serving as a staple cereal crop, while maize is grown on approximately 2,680 square kilometers (1,035 square miles), used for both human consumption and animal feed. These figures highlight the scale and diversity of Portugal’s agricultural land use, illustrating the balance between traditional Mediterranean crops and cereals essential for food security. Portuguese wine and olive oil have earned a reputation for high quality within domestic markets, a factor that has helped insulate these products from the pressures of external competition. Despite the availability of foreign wines and olive oils often offered at significantly lower prices, Portuguese consumers have demonstrated strong preference for locally produced goods, valuing their distinctive flavors, traditional production methods, and cultural significance. This consumer loyalty has supported the sustainability of domestic producers and reinforced the economic viability of these sectors, enabling them to maintain market share and profitability even in the face of globalized competition. Portugal’s history as a wine producer and exporter extends back to the dawn of Western civilization, reflecting a deep-rooted tradition that has shaped the country’s agricultural identity for millennia. Among the most renowned Portuguese wine exports are Port Wine, Vinho Verde, and Madeira Wine, each associated with specific regions and production techniques. Port Wine, produced in the Douro Valley, is a fortified wine known worldwide for its rich, sweet flavor and aging potential. Vinho Verde, originating from the Minho region in the northwest, is celebrated for its light, fresh, and slightly effervescent character. Madeira Wine, from the Madeira archipelago, is distinguished by its unique aging process involving heat exposure, resulting in a robust and long-lasting fortified wine. These products have secured Portugal’s position in international wine markets and contribute significantly to the country’s agricultural export revenues. In addition to wine, Portugal is recognized for its production of high-quality fruits, which are cultivated in various regions known for their favorable climatic and soil conditions. The Algarve region, in the southernmost part of the country, is famous for its oranges, which benefit from the area’s warm climate and abundant sunshine. Large-scale cherry production occurs in the Cova da Beira and Alto Alentejo regions, where cooler temperatures and suitable soil types support the growth of this fruit. The Oeste region, located along the central coast, is noted for the pêra rocha, a distinctive pear variety prized for its sweet flavor and crisp texture. Meanwhile, the town of Alcobaça has lent its name to the maçã de Alcobaça, a variety of apple renowned for its quality and taste. These fruit crops not only serve domestic markets but also contribute to Portugal’s agricultural exports. In recent years, niche crops such as blueberries and raspberries have experienced substantial growth in production, reflecting a strategic shift toward high-value, export-oriented agriculture. These berries have gained popularity in international markets due to their nutritional benefits and demand for fresh, exotic fruits. Portuguese producers have capitalized on this trend by expanding cultivation areas and improving production techniques to meet stringent quality standards required by export markets. This diversification has provided new income streams for farmers and enhanced the overall competitiveness of Portugal’s agricultural sector. Beyond the more traditional and emerging crops, Portugal’s agricultural exports include a variety of horticultural and floricultural products, which encompass vegetables, flowers, and ornamental plants grown for both domestic consumption and international trade. The country also produces beet sugar, derived from sugar beet cultivation, which contributes to the sweetener market. Sunflower oil is another significant product, obtained from sunflower seeds grown in suitable regions, and is valued for its culinary uses. Cork, harvested from the cork oak forests that are abundant in Portugal, represents a unique and economically important export commodity, as Portugal is the world’s largest producer of cork. Tobacco cultivation, although reduced compared to historical levels, remains part of the agricultural landscape and contributes to export revenues. Collectively, these diverse products illustrate the multifaceted nature of Portuguese agriculture and its integration into global markets.

Portugal’s Exclusive Economic Zone (EEZ) encompasses an extensive maritime area of 1,727,408 square kilometers, positioning it as the third largest EEZ within the European Union and the twentieth largest globally. This vast expanse of oceanic territory grants Portugal significant rights over marine resources and fisheries management, underpinning the country’s substantial fishing industry. The Portuguese fishing fleet is notably large and diversified, with vessels categorized according to their operational range into three primary groups: local fishing vessels, coastal fishing vessels, and long-distance fishing vessels. This classification reflects differences in vessel size, fishing methods, target species, and areas of operation, enabling a multifaceted approach to exploiting marine resources. In 2004, the local fishing fleet was predominantly composed of small, traditional vessels measuring under 5 gross tonnage (GT), which accounted for approximately 87% of the total number of fishing vessels in Portugal. Despite their numerical dominance, these small vessels represented only 8% of the total gross tonnage of the fleet, indicating their relatively modest size and capacity. These local vessels were typically polyvalent, meaning they were equipped to employ multiple fishing techniques such as hooks, gill nets, and traps. This versatility allowed fishermen to target a wide variety of species, adapting to seasonal and regional availability. The polyvalent nature of these vessels was crucial in sustaining local fishing communities by enabling them to exploit diverse marine resources efficiently. Although the physical output or volume of catch from the local fleet was relatively low compared to larger vessels, the income generated was reasonable due to the high commercial value of the species caught. Species such as octopus, black scabbardfish, conger, pouting, hake, and anglerfish were particularly prized in the market, contributing significantly to the economic viability of these small-scale operations. The high market prices of these species compensated for the smaller quantities landed, ensuring that local fishermen could maintain sustainable livelihoods despite the limited capacity of their vessels. Within the local fleet, purse seine fishing played a prominent role, especially on the Portuguese mainland, where it primarily targeted sardine. This fishery was highly significant, representing 37% of the total landings by weight in 2004. Purse seining is a fishing method that involves encircling schools of pelagic fish with a large net and then drawing the net closed like a purse, effectively capturing large quantities of fish. Sardine, being a key species for both domestic consumption and export, formed the backbone of this fishery, highlighting the importance of purse seine vessels within the local fleet structure. In contrast to the local fleet, the coastal fishing fleet, while comprising only 13% of the total number of vessels, accounted for the majority of the fleet’s gross tonnage, representing 93% of the total. These larger vessels operated farther from shore and sometimes extended their activities beyond Portugal’s EEZ, indicating a capacity for more extensive and intensive fishing operations. The coastal fleet included a variety of vessel types, such as polyvalent vessels, purse seiners, and trawlers, each specialized for different fishing methods and target species. This diversity within the coastal fleet allowed for a broad exploitation of marine resources along the continental shelf and adjacent waters. Trawlers within the coastal fleet operated exclusively on the mainland continental shelf and focused on demersal species, which inhabit the seabed or near-bottom waters. Key target species for these trawlers included horse mackerel, blue whiting, octopus, and various crustaceans. The trawling method involves dragging a large net along the sea floor to capture bottom-dwelling species, making it particularly suited for these demersal fish and invertebrates. Among the crustaceans targeted by the trawling fishery, Norway lobster, red shrimp, and deepwater rose shrimp were of particular economic importance. These species contributed to the diversity and value of the coastal fleet’s catch, reflecting the specialization and adaptability of Portuguese fisheries. The composition of fish landings in Portugal in 2004 illustrates the relative importance of different species by both weight and value. Sardine was the most significant species by weight, accounting for 37% of total landings, followed by mackerel at 9% and horse mackerel at 8%. These pelagic species formed the bulk of the catch in terms of volume, underscoring their ecological abundance and commercial demand. However, when considering the value of landings, sardine accounted for only 13%, while horse mackerel represented 8%, and mackerel contributed a mere 1%. This discrepancy between weight and value highlights the varying market prices and economic importance of different species. Molluscs played a substantial role in the Portuguese fisheries sector, representing 12% of total landings by weight in 2004 but contributing disproportionately to the total value of landings at 22%. This indicates that molluscs, such as clams, mussels, and squid, commanded higher prices per unit weight relative to many fish species, enhancing their economic significance. Similarly, crustaceans, although constituting only 0.6% of total landings by weight, accounted for 5% of the total value of landings. The high market value of crustaceans like Norway lobster and shrimp underscores their importance despite their relatively small volume in the overall catch. Together, these figures reflect the complex interplay between species abundance, fishing effort, and market dynamics within Portugal’s fisheries sector.

Oeiras Municipality, situated within the Lisbon metropolitan area, serves as a strategic hub for numerous Portuguese subsidiaries of prominent multinational corporations. Its proximity to the capital city, combined with well-developed infrastructure and a skilled workforce, has made Oeiras an attractive location for international companies seeking to establish their operations in Portugal. This concentration of multinational subsidiaries has contributed significantly to the local economy, fostering innovation, employment, and integration into global value chains. The municipality’s role as a corporate headquarters center underscores the broader trend of economic modernization and internationalization within Portugal’s industrial landscape. The Portuguese industrial sector underwent substantial growth and transformation following the Second World War, marking a period of rapid economic development and structural change. Industrial output expanded steadily as the country sought to diversify its economy beyond traditional agriculture and extractive activities. By 1974, the industry had reached its zenith, accounting for nearly 35% of Portugal’s gross domestic product (GDP), a clear indication of its central role in the national economy. This period was characterized by a high degree of diversification, with various manufacturing and processing sectors emerging, reflecting both domestic demand and export potential. The industrial expansion during these decades laid the foundation for Portugal’s subsequent economic modernization and integration into the European market. In the present day, Portugal’s industrial base encompasses a wide array of sectors, reflecting both its historical strengths and contemporary economic priorities. Key industries include machinery manufacturing and the electrical and electronics sectors, which produce a range of products from industrial equipment to consumer electronics. The automotive industry, alongside shipbuilding, represents significant components of the mechanical industries, contributing to both domestic supply and export markets. Additionally, the country maintains robust injection moulding, plastics, and ceramics industries, which support various manufacturing processes and product lines. Traditional sectors such as textiles, footwear, and leather continue to play an important role, often blending artisanal skills with modern production techniques. The oil refinery and petrochemical industries, centered around major facilities, provide essential inputs for energy and chemical products. Cement production, beverages, and food processing are also vital, reflecting the integration of industrial activity with Portugal’s agricultural outputs. Moreover, the furniture, pulp and paper, wood, and cork industries highlight the country’s utilization of its natural resources and craftsmanship traditions, contributing to both domestic markets and exports. The automotive and other mechanical industries, including the bicycle manufacturing sector, are predominantly concentrated in and around several key urban centers. Setúbal, Porto, Lisbon, Aveiro, Braga, and Mangualde have emerged as focal points for these industries due to their access to transportation networks, skilled labor pools, and established industrial infrastructures. These cities host a variety of manufacturing facilities ranging from assembly plants to component producers, supporting a complex supply chain that serves both national and international markets. The clustering of mechanical industries in these locations has facilitated technological exchange, innovation, and economies of scale, thereby enhancing competitiveness. The bicycle industry, in particular, has gained prominence within this cluster, benefiting from increasing demand for sustainable transportation options and Portugal’s manufacturing expertise. In addition to traditional manufacturing hubs, Coimbra and Oeiras have developed emerging technology-based industries, particularly in the fields of pharmaceuticals and software development. Coimbra, with its historic university and research institutions, has become a center for pharmaceutical research and production, fostering innovation and attracting investment in life sciences. Oeiras, leveraging its proximity to Lisbon and its established multinational presence, has cultivated a dynamic software development sector, hosting numerous technology firms specializing in software engineering, information technology services, and digital innovation. These developments reflect a broader shift in the Portuguese economy towards knowledge-intensive industries, emphasizing research and development, high-skilled labor, and integration into global technology networks. Sines stands out as a critical industrial and logistical hub, hosting the largest oil refinery in Portugal and serving as a major petrochemical center. The refinery processes crude oil into a variety of petroleum products, supplying domestic energy needs and supporting industrial activities. The petrochemical facilities in Sines produce essential chemical intermediates used in plastics, fertilizers, and other industrial applications, underpinning several downstream industries. Beyond its industrial capacity, Sines is also the busiest port in Portugal, handling significant volumes of cargo including bulk goods, containers, and energy products. The port’s strategic location on the Atlantic coast facilitates international trade and supports the integration of Portuguese industry into global supply chains. Sines thus plays a multifaceted role in the national economy, combining heavy industry with advanced logistics and transportation services. Maia is home to one of Portugal’s largest industrial parks, which hosts a diverse range of industries with particular prominence in wood processing and food production. The industrial park provides modern facilities and infrastructure that attract both national and international companies, fostering industrial agglomeration and synergies. Wood processing industries in Maia benefit from Portugal’s abundant forest resources and expertise in furniture and timber products, producing a variety of goods for domestic consumption and export. The food industries in the area encompass a broad spectrum of activities, including processing, packaging, and distribution, contributing to the country’s agro-industrial complex. Maia’s industrial park exemplifies the trend towards specialized industrial zones that support efficient production, innovation, and competitiveness. The pulp and paper industry holds significant importance in the cities of Figueira da Foz and Setúbal, both of which have developed extensive facilities dedicated to the production of paper products. These centers leverage Portugal’s forest resources, particularly eucalyptus plantations, which provide raw material for pulp production. The industry in these cities encompasses the entire value chain from wood processing to pulp production and paper manufacturing, supplying a range of products for printing, packaging, and industrial uses. The presence of these industries supports local employment and contributes to export revenues, while also driving technological advancements in sustainable forestry and production methods. Figueira da Foz and Setúbal thus represent key nodes in Portugal’s pulp and paper sector, integrating natural resource management with industrial processing. Marinha Grande has earned recognition as the foremost glass-making center in Portugal, with a long-standing tradition in glass manufacturing that dates back centuries. The city hosts numerous factories specializing in the production of flat glass, glass containers, and artistic glassware, combining traditional craftsmanship with modern industrial techniques. Marinha Grande’s glass industry serves both domestic markets and international clients, benefiting from skilled labor, technological innovation, and a strong industrial heritage. The concentration of glass manufacturers in this city has fostered a specialized industrial cluster, promoting research and development as well as collaboration among firms. This reputation has positioned Marinha Grande as a vital contributor to Portugal’s industrial diversity and export capacity. The cities of Leiria, Oliveira de Azeméis, Vale de Cambra, and Viseu have developed important light industries, particularly in injection moulding and plastics manufacturing. These industries produce a wide range of plastic components and products used in various sectors including automotive, packaging, consumer goods, and construction. The specialization in injection moulding techniques allows manufacturers in these locations to produce complex, high-quality parts with efficiency and precision. The clustering of these industries supports supply chain integration and technological innovation, enhancing the competitiveness of Portuguese light manufacturing. These cities exemplify the role of medium-sized urban centers in sustaining industrial diversification and adapting to evolving market demands. Shipbuilding and ship repair industries are concentrated primarily in Viana do Castelo and Setúbal, both of which have long-standing maritime traditions and strategic locations along Portugal’s coastline. These centers host shipyards that construct a variety of vessels, including commercial ships, fishing boats, and specialized marine craft. The ship repair facilities provide essential maintenance and refurbishment services, supporting the operational needs of domestic and international fleets. The industries in these cities benefit from skilled labor, technical expertise, and access to maritime transport routes, enabling them to compete in global markets. The shipbuilding and repair sectors contribute significantly to local economies and maintain Portugal’s presence in the global maritime industry. In recent decades, Portugal has witnessed the development of modern, non-traditional technology-based industries, including aerospace, biotechnology, and information technology, which have emerged across various locations throughout the country. These industries represent a shift towards high-tech, knowledge-intensive sectors that emphasize research and innovation. The aerospace industry, for instance, has established key centers in Alverca, Covilhã, Évora, and Ponte de Sor, where advanced manufacturing, maintenance, and research activities take place. Leadership in this sector is provided by the local branch of the Brazilian aerospace company Embraer, as well as by OGMA, a prominent Portuguese aerospace firm. These companies engage in the production of aircraft components, maintenance services, and technological development, positioning Portugal as a competitive player in the European aerospace market. Since the early 21st century, the biotechnology and information technology industries have expanded significantly, with numerous major companies establishing operations primarily in the metropolitan areas of Lisbon, Porto, Braga, Coimbra, and Aveiro. These urban centers offer a combination of research institutions, skilled labor, and infrastructure conducive to innovation-driven enterprises. Biotechnology firms focus on pharmaceuticals, medical devices, and life sciences research, often collaborating with universities and research centers to develop cutting-edge products and technologies. Information technology companies specialize in software development, digital services, and telecommunications, contributing to the digital transformation of the Portuguese economy. The concentration of these industries in key metropolitan areas has fostered dynamic ecosystems that support entrepreneurship, investment, and integration into global technology networks, reflecting Portugal’s ongoing economic modernization and diversification.

The Serpa solar power plant stands as a prominent symbol of Portugal’s commitment to expanding its solar energy capacity and is recognized as one of the largest solar power facilities in the world. Located in the Alentejo region, this facility exemplifies the country’s strategic investment in harnessing solar power, capitalizing on Portugal’s favorable climate with abundant sunshine. The development of the Serpa plant marked a significant milestone in the diversification of Portugal’s renewable energy portfolio, showcasing the feasibility and scalability of large-scale photovoltaic installations within the national grid. Its establishment not only contributed to increasing Portugal’s renewable energy output but also positioned the country as a leader in solar energy infrastructure in Southern Europe. Portugal’s journey in wind energy began from virtually no presence in the late 1990s to becoming the sixth-largest producer of wind energy globally, a remarkable ascent that underscores the country’s rapid adoption and expansion of wind power technologies. During the 1990s, wind energy was practically nonexistent in Portugal, with limited infrastructure and negligible contribution to the national energy mix. However, through a combination of favorable government policies, investment incentives, and technological advancements, wind power capacity grew exponentially. By the early 21st century, Portugal had installed numerous wind farms across its territory, particularly in regions with optimal wind conditions such as the northern and central parts of the country. This growth was instrumental in reducing dependence on fossil fuels and advancing Portugal’s renewable energy targets. A critical driver behind Portugal’s renewable energy expansion has been the active participation of domestic companies, most notably Energias de Portugal (EDP), the country’s largest energy company. Since the late 1990s, EDP, in collaboration with government support, has heavily invested in renewable energy projects that extend beyond the traditional reliance on hydroelectric power. This strategic shift included substantial investments in wind farms, solar power plants, and biomass energy facilities. The government’s role was pivotal in establishing regulatory frameworks, subsidies, and incentives that encouraged private sector participation and technological innovation in renewables. This partnership between the public and private sectors facilitated the modernization of Portugal’s energy infrastructure and the integration of diverse renewable sources into the national grid. By 2010, Portugal had made significant strides in its renewable energy sector, with renewable sources accounting for 52% of the total energy produced in the country. This milestone reflected the cumulative impact of sustained investments, policy support, and technological advancements over the preceding decade. The increase in renewable energy production contributed to reducing greenhouse gas emissions and enhancing energy security. Hydroelectric power, long established in Portugal, continued to play a substantial role, while newer sources such as wind and solar began to contribute increasingly larger shares. This transition also demonstrated Portugal’s ability to meet a majority of its energy needs through clean and sustainable means, setting a precedent for further growth in the following years. The upward trajectory of renewable energy production continued into 2013, when renewables accounted for 61.7% of Portugal’s total energy output. This energy mix was diversified, comprising 30.4% hydroelectric power, which remained the largest single contributor, followed by wind energy at 24.1%. Biomass energy contributed 5.2%, reflecting the utilization of organic materials and waste for power generation. Solar energy, while still a smaller share, accounted for 0.9%, indicative of ongoing expansion in photovoltaic capacity. Additionally, 1.1% of renewable energy came from other sources, notably geothermal energy, which is particularly significant in the Azores archipelago due to its volcanic activity. This diversified portfolio underscored Portugal’s comprehensive approach to renewable energy development, leveraging its geographic and climatic advantages. Portugal’s renewable energy strategy in 2013 had a pronounced impact on the country’s energy independence, reducing its reliance on energy imports to a mere 5%. This reduction in imports was a direct consequence of the increased domestic production of renewable energy, which allowed Portugal to meet the vast majority of its energy demand internally. The decrease in energy imports not only enhanced national energy security but also had positive economic implications by reducing the outflow of capital associated with purchasing fossil fuels from abroad. This shift towards self-sufficiency was a critical component of Portugal’s broader energy policy objectives, aimed at fostering sustainability, economic resilience, and environmental stewardship. Despite the significant progress in renewable energy, fossil fuels continued to account for 38.3% of the energy produced in Portugal in 2013. Although this represented a decline compared to previous decades, fossil fuels remained an important part of the energy mix, primarily used to ensure grid stability and meet peak demand periods. The ongoing reliance on fossil fuels highlighted the challenges associated with transitioning to a fully renewable energy system, including issues related to intermittency and energy storage. Nevertheless, the overall trend was toward a gradual reduction in fossil fuel dependence, driven by policy measures, technological innovation, and increasing competitiveness of renewable energy sources. The rise in clean energy production in 2013 generated substantial economic benefits for Portugal, including savings estimated at 806 million Euros. These savings were realized through the reduction of fossil fuel imports, which lowered the country’s expenditure on external energy supplies, and through decreased costs associated with CO2 emission licenses under the European Union’s emissions trading system. By reducing carbon emissions, Portugal was able to minimize its financial liabilities related to carbon pricing mechanisms, thereby improving the economic viability of its energy sector. These financial advantages reinforced the economic rationale for continued investment in renewable energy infrastructure and underscored the broader benefits of transitioning to a low-carbon economy. In May 2016, Portugal achieved a remarkable global milestone by becoming the second country worldwide to supply all its energy consumption exclusively from renewable sources for four consecutive days. This achievement demonstrated the country’s capability to operate its entire electricity system on renewables without resorting to fossil fuel backup, reflecting the maturity and integration of its renewable energy infrastructure. The continuous supply was made possible through the combined output of hydroelectric, wind, solar, biomass, and geothermal power plants, supported by effective grid management and energy storage solutions. This event garnered international attention as a proof of concept for the feasibility of 100% renewable energy systems, inspiring other nations to pursue similar goals. Portugal’s energy policy has historically excluded nuclear power as part of its energy mix. Plans to develop nuclear power plants were abandoned in the 1970s, influenced by public opposition, safety concerns, and the country’s strategic preference for renewable energy sources. Since that time, Portugal has chosen not to invest in nuclear energy, resulting in the absence of any nuclear power plants within its territory. This decision has shaped the country’s energy trajectory, focusing efforts and resources on developing renewable alternatives and enhancing energy efficiency. The avoidance of nuclear energy reflects Portugal’s broader commitment to sustainable and environmentally responsible energy policies.

The tertiary sector in Portugal has grown to become the predominant force within the national economy, contributing 74.4% of the country’s gross domestic product (GDP) and providing employment for 65.9% of the working population. This expansion reflects a broader structural shift from traditional agriculture and industry towards services, mirroring trends observed in many developed economies. The dominance of the tertiary sector underscores its critical role in sustaining economic growth, generating income, and creating jobs across diverse service industries including trade, finance, tourism, transportation, and retail. Over recent decades, the increasing urbanization, rising consumer demand, and technological advancements have further accelerated the sector’s growth, positioning it as the backbone of Portugal’s economic landscape. Within the tertiary sector, the trade industry has demonstrated the most pronounced growth rates, fueled by several key developments. The adoption of modern distribution methods has revolutionized the way goods are stored, transported, and delivered, allowing for greater efficiency and responsiveness to consumer needs. Enhanced transport infrastructure, including improvements in road networks, railways, and ports, has facilitated smoother and faster movement of products both domestically and internationally. Furthermore, advancements in telecommunications have enabled better coordination, inventory management, and customer service, contributing to the sector’s dynamism. These factors combined have not only expanded the scale of trade activities but also improved their quality and competitiveness, making trade a pivotal component of Portugal’s service economy. Financial services companies in Portugal have also undergone significant transformation, particularly as a result of privatization initiatives implemented over the past few decades. The privatization of state-owned financial institutions and the liberalization of the banking sector have introduced greater competition, innovation, and operational efficiency. These reforms have allowed financial tertiary companies to increase their productivity, expand their range of services, and attract investment, both domestic and foreign. The modernization of banking technology and regulatory frameworks has further supported this growth, enabling Portuguese financial institutions to better serve customers and contribute to the overall stability and development of the economy. Tourism stands out as a major pillar of Portugal’s economy, accounting for 16.5% of GDP by the year 2023. This sector’s significance is rooted in the country’s rich cultural heritage, diverse landscapes, favorable climate, and well-developed hospitality infrastructure. Over the years, Portugal has successfully positioned itself as a popular destination for international travelers seeking historical sites, coastal resorts, culinary experiences, and outdoor activities. The government and private sector have invested substantially in promoting tourism, improving facilities, and enhancing service quality, all of which have helped to attract a growing number of visitors. The economic impact of tourism extends beyond direct spending, generating employment in related sectors such as transportation, retail, and entertainment, thereby reinforcing its role as a key driver of economic prosperity. In 2023, Portugal welcomed 26.5 million foreign tourists, a figure that reflects the country’s strong appeal on the global travel stage. When combined with domestic tourism, the total number of tourists reached approximately 47 million, indicating the widespread popularity of travel within Portugal itself. This substantial influx of visitors has contributed significantly to foreign exchange earnings, business revenues, and tax receipts, while also stimulating investment in infrastructure and services. The diversity of tourist origins, ranging from European neighbors to transatlantic markets, has helped to diversify the sector’s customer base and reduce vulnerability to regional economic fluctuations. The robust tourism numbers also highlight the resilience and adaptability of Portugal’s service sector in the face of global challenges such as economic downturns and public health crises. Several prominent Portuguese service sector companies have pursued international expansion as part of their growth strategies, exemplifying the global reach of the country’s commercial enterprises. Among these, Jerónimo Martins stands out as a leading retailer that operates the largest supermarket chain in Poland, demonstrating successful market penetration beyond Portugal’s borders. The company has also made significant investments in the Colombian market, further diversifying its geographic footprint and revenue streams. This internationalization reflects broader trends among Portuguese service firms seeking to capitalize on emerging markets and leverage competitive advantages such as operational expertise and brand recognition. The expansion of such companies not only enhances their profitability but also contributes to Portugal’s economic influence and integration within the global economy. TAP Portugal, the national airline, plays a crucial role in facilitating international transit traffic between Europe, Africa, and Latin America, with a particular emphasis on connections to Brazil. As a key player in these transcontinental routes, TAP has established itself as an important conduit for passenger and cargo movement, supporting tourism, business travel, and trade flows. The airline is recognized for maintaining a strong safety record, which has bolstered its reputation and customer confidence over the years. TAP’s strategic positioning and network connectivity have enabled it to serve as a vital link in Portugal’s service sector, contributing to the country’s accessibility and economic integration with diverse global regions. Commercial infrastructure developments such as the Vasco da Gama Mall in Lisbon exemplify the tangible support systems underpinning the growth of Portugal’s services sector. This large shopping complex provides a modern, attractive venue for retail businesses, entertainment, and dining, catering to both local residents and visitors. The mall’s presence enhances consumer choice and convenience, stimulates retail sales, and generates employment opportunities within the urban economy. Such infrastructure projects reflect broader investments in commercial real estate and urban development that facilitate the expansion and diversification of service activities. By creating vibrant commercial hubs, these developments contribute to the dynamism and competitiveness of Portugal’s tertiary sector, reinforcing its central role in the national economy.

In 2022, the Services sector emerged as the most prominent in terms of company registrations in Portugal, with a total of 224,004 companies officially recorded. This sector’s dominance reflected the broader economic shift toward service-oriented activities, encompassing a wide range of industries such as hospitality, professional services, education, healthcare, and information technology. The substantial number of companies within this sector underscored its critical role in the Portuguese economy, serving as a major source of employment and contributing significantly to the country’s gross domestic product. The growth in service-related enterprises also mirrored global trends where economies increasingly relied on intangible goods and customer-focused offerings rather than traditional manufacturing or agriculture. Following the Services sector, the Retail Trade sector held the position of the second largest in terms of company registrations in 2022, with 99,596 companies. This sector included businesses engaged in the sale of goods directly to consumers, ranging from small, family-owned shops to large retail chains and franchises. The robust number of retail companies highlighted the sector’s importance in facilitating consumer access to a variety of products, thereby driving domestic consumption and supporting supply chains within Portugal. The retail landscape was also influenced by evolving consumer behaviors, including the rise of e-commerce and omnichannel retailing, which encouraged new business models and diversification within the sector. The Finance, Insurance, and Real Estate sector ranked third in 2022, with 66,581 companies registered. This sector encompassed a broad array of financial services, including banking institutions, insurance firms, investment companies, and real estate agencies. The significant presence of companies in this sector reflected Portugal’s growing financial market sophistication and the increasing demand for financial products and services by both individuals and businesses. Real estate activities, in particular, played a pivotal role due to the country’s dynamic property market, which attracted domestic and foreign investment. The sector’s development was also supported by regulatory reforms and technological advancements that enhanced financial inclusion and operational efficiency. By 2023, Portugal had a total of 1,526,926 active companies spanning all sectors of the economy. This figure illustrated the country’s vibrant entrepreneurial landscape and the diversity of its economic activities. The aggregate number of active companies included enterprises of various sizes, from micro and small businesses to medium and large corporations, reflecting a broad spectrum of economic participation. The high number of active companies was indicative of a resilient business environment capable of adapting to changing market conditions, regulatory frameworks, and consumer demands. The total number of active companies in Portugal in 2023 represented a 6.3% increase compared to the previous year, signaling a period of growth and expansion within the national economy. This rise in company registrations and continued business activity suggested an improving economic climate, characterized by increased investment, innovation, and entrepreneurial initiatives. The growth rate also highlighted the effectiveness of policies aimed at fostering business creation and sustainability, including support for startups, simplification of administrative procedures, and access to financing. Such an upward trend in active companies contributed to job creation, enhanced competitiveness, and overall economic development in Portugal.

The Portuguese financial market is anchored by Euronext Lisbon, the country’s principal stock exchange, which forms part of Euronext, a prominent pan-European group of stock exchanges operating across multiple countries. Euronext Lisbon plays a central role in facilitating capital formation and investment within Portugal, providing a platform for the trading of equities, bonds, and other financial instruments. This integration into the broader Euronext network enhances liquidity and access to international investors, thereby strengthening Portugal’s financial market infrastructure. Oversight of Euronext Lisbon is conducted by the Portuguese Securities Market Commission (Comissão do Mercado de Valores Mobiliários, CMVM), which ensures regulatory compliance, market transparency, and investor protection. The CMVM’s regulatory framework aligns with European Union directives and international best practices, contributing to the integrity and stability of the Portuguese securities market. A key indicator of the Portuguese stock market’s performance is the PSI-20, the country’s most selective and widely recognized stock index. The PSI-20 comprises the 20 largest and most liquid companies listed on Euronext Lisbon, serving as a benchmark for investors and reflecting the overall health of Portugal’s equity market. The index includes firms from diverse sectors such as banking, telecommunications, energy, and retail, thereby providing a comprehensive overview of the domestic economy’s corporate landscape. Over time, the PSI-20 has become an essential tool for portfolio management and market analysis, influencing investment decisions both domestically and internationally. The central monetary authority in Portugal is the Banco de Portugal, which functions as an integral component of the European System of Central Banks (ESCB). As the national central bank, Banco de Portugal is responsible for implementing monetary policy in line with the European Central Bank (ECB), maintaining financial stability, overseeing the banking sector, and managing currency issuance. Its role within the ESCB framework ensures that Portugal’s monetary policy is harmonized with the broader eurozone objectives, including price stability and economic growth. Banco de Portugal also supervises payment systems and contributes to the formulation of regulatory standards, thereby underpinning the soundness of the country’s financial infrastructure. Within the Portuguese banking sector, Banco Comercial Português (BCP) and Caixa Geral de Depósitos (CGD) stand out as the two largest institutions. BCP operates as a private commercial bank with extensive domestic and international operations, while CGD is state-owned and plays a strategic role in supporting public policy objectives and economic development. Both banks have substantial market shares in retail and corporate banking services, including deposit-taking, lending, and asset management. Their prominence extends beyond traditional banking activities, as they hold strategic stakes in other sectors of the economy, notably the insurance industry. This cross-sectoral involvement reflects the interconnected nature of Portugal’s financial system and the banks’ influence on broader economic activities. Foreign bank participation in Portugal is relatively high, contributing to a diversified and competitive banking environment. International banks have established operations in the country, bringing additional capital, expertise, and innovation to the domestic market. This foreign presence complements the significant state ownership represented by Caixa Geral de Depósitos, which remains a dominant player, particularly in sectors aligned with government priorities. The coexistence of foreign and state-owned banks fosters a dynamic financial ecosystem, balancing market-driven efficiency with public policy considerations. Portugal’s financial system is widely regarded as sound, well managed, and competitive, with short-term risks and vulnerabilities effectively contained. This assessment is supported by robust regulatory oversight, prudent risk management practices, and a stable macroeconomic environment. The system benefits from a strong financial policy framework that promotes transparency, accountability, and resilience against external shocks. Regulatory authorities have implemented measures to mitigate systemic risks, enhance capital adequacy, and improve governance standards across financial institutions. These efforts have contributed to maintaining confidence among investors, depositors, and other stakeholders. Despite its relatively small size and concentration, Portugal’s banking system compares favorably with other European Union countries in terms of efficiency, profitability, and asset quality. Portuguese banks have demonstrated the ability to generate sustainable earnings while maintaining prudent risk profiles. Their operational efficiency is reflected in cost-to-income ratios that are competitive within the EU context, and profitability metrics indicate a healthy return on equity. Asset quality has improved significantly over recent years, with non-performing loan ratios declining due to effective credit risk management and economic recovery. These positive trends underscore the resilience and adaptability of Portugal’s banking sector amid evolving market conditions. The solvency of Portuguese banks is close to European levels, indicating that capital buffers are generally adequate to absorb potential losses and support ongoing operations. Capital adequacy ratios, measured in accordance with Basel III standards, have been maintained at levels consistent with regulatory requirements and peer institutions across the eurozone. This capital strength provides a foundation for continued lending and financial intermediation, which are essential for economic growth. Supervisory authorities closely monitor solvency metrics to ensure that banks remain well capitalized, particularly in the face of economic uncertainties or adverse market developments. Supervision of Portuguese financial institutions, especially larger entities, is characterized by active, professional, and well-organized oversight across all financial sub-sectors. The Banco de Portugal, in collaboration with the CMVM and other regulatory bodies, implements comprehensive supervisory frameworks that encompass on-site inspections, off-site monitoring, and risk assessments. This proactive approach facilitates early identification of vulnerabilities and timely intervention to address emerging risks. Supervisory practices adhere to international standards and benefit from cooperation with European supervisory authorities, enhancing the overall effectiveness of financial regulation in Portugal. The insurance sector in Portugal has performed well, supported in part by rapid market deepening and increased penetration of insurance products. Growth in both life and non-life insurance segments has been driven by rising consumer awareness, regulatory reforms, and economic expansion. The sector’s development has contributed to financial stability by diversifying sources of risk management and providing long-term savings vehicles. Insurance companies have expanded their product offerings and distribution channels, adapting to changing demographic and economic trends. This dynamism has reinforced the sector’s role as an integral component of the Portuguese financial system. Both the life and non-life insurance sectors in Portugal are sensitive to various market and underwriting risks, reflecting the inherent uncertainties associated with insurance activities. Market risks include fluctuations in interest rates, equity prices, and real estate values, which can affect the valuation of insurance liabilities and investment portfolios. Underwriting risks pertain to the accuracy of risk assessment, pricing, and claims management. Despite these vulnerabilities, the insurance sector is generally estimated to be capable of withstanding several severe shocks, owing to prudent risk management, adequate capital reserves, and regulatory oversight. Stress testing and scenario analyses conducted by supervisory authorities support these assessments, ensuring that insurers maintain sufficient resilience. The impact of shocks on individual insurers within the Portuguese insurance sector varies widely, depending on factors such as size, business mix, risk exposure, and capital adequacy. Larger, well-capitalized companies with diversified portfolios tend to be more resilient to adverse events, while smaller or more specialized insurers may face greater challenges. This heterogeneity underscores the importance of tailored supervisory approaches and risk mitigation strategies. Regulatory frameworks emphasize the need for robust governance, transparency, and contingency planning to safeguard policyholders and maintain market confidence. Overall, the Portuguese financial market, encompassing banking, securities, and insurance, demonstrates a high degree of stability and integration within the broader European financial system.

In 2006, Spain emerged as the principal destination for Portuguese exports, reflecting the close economic ties between the two neighboring Iberian countries. The total value of exports from Portugal to Spain reached $11,493,400,000, underscoring Spain’s role as a critical market for Portuguese goods and services. This significant trade volume highlighted the interdependence of their economies, facilitated by geographic proximity, shared infrastructure, and membership in the European Union, which reduced trade barriers and promoted cross-border commerce. The prominence of Spain as an export market also reflected the diversity of Portuguese products that found demand across the border, ranging from manufactured goods and textiles to agricultural products and machinery. Beyond Spain, the global distribution of Portuguese exports in 2006 revealed a broader pattern of trade relationships that extended to various regions worldwide. When analyzing the export values relative to the benchmark set by exports to Spain, other countries and regions could be understood in terms of their proportional share of Portugal’s total export portfolio. This comparative framework allowed for a clearer understanding of Portugal’s international trade dynamics, illustrating which markets held strategic importance and which were emerging as potential growth areas. For instance, while Spain accounted for the largest single share, other European Union countries, as well as markets in Africa, the Americas, and Asia, contributed smaller but significant percentages relative to the Spanish export figure. This percentage-based analysis of export distribution provided insights into Portugal’s competitiveness and market diversification strategies during the mid-2000s. It highlighted the reliance on the Spanish market while simultaneously pointing to efforts to expand trade relations beyond the Iberian Peninsula. The data from 2006 served as a benchmark for assessing shifts in trade patterns in subsequent years, especially in light of evolving global economic conditions, changes in demand, and Portugal’s own industrial and commercial development. Understanding the relative export shares also informed policymakers and business leaders about the vulnerabilities and opportunities within Portugal’s external trade, guiding decisions aimed at enhancing competitiveness and securing more balanced international economic engagement.

Portugal’s economy attained the 36th position in the World Competitiveness Ranking for the year 2024, as published by the International Institute for Management Development (IMD), a Swiss-based research and education institution renowned for its annual assessments of national competitiveness. This ranking reflects a comprehensive evaluation of Portugal’s economic performance, government efficiency, business efficiency, and infrastructure, among other critical factors that collectively gauge a country’s ability to create and maintain an environment conducive to sustainable economic growth and prosperity. The IMD World Competitiveness Ranking is widely regarded as a benchmark for comparing the economic health and global competitiveness of nations, incorporating quantitative data and survey responses from business executives worldwide. The 2024 ranking represents a notable advancement for Portugal compared to its standing a decade earlier. In the 2013–2014 edition of the IMD World Competitiveness Ranking, Portugal was positioned 51st, indicating a lower relative competitiveness among the 64 economies evaluated at that time. The improvement from 51st to 36th over roughly ten years underscores a significant enhancement in various dimensions of Portugal’s economic landscape. This upward trajectory can be attributed to a combination of structural reforms, increased investment in innovation and technology, improved fiscal management, and efforts to streamline regulatory frameworks that have collectively strengthened the country’s business environment and economic resilience. Between 2013 and 2024, Portugal experienced a series of economic reforms aimed at addressing the aftermath of the European debt crisis, which had severely impacted the country’s financial stability and growth prospects. These reforms included measures to enhance labor market flexibility, reduce public debt levels, and promote export-oriented industries, which helped to restore investor confidence and stimulate economic activity. Additionally, Portugal’s strategic focus on sectors such as tourism, renewable energy, and information technology contributed to diversifying its economic base and improving productivity. The enhanced competitiveness ranking thus reflects both the tangible outcomes of these policy initiatives and the broader improvements in governance and institutional quality. The IMD’s methodology for the World Competitiveness Ranking incorporates a blend of hard statistical data and soft survey data, capturing not only economic indicators but also perceptions of business leaders regarding the national environment. Portugal’s rise in this ranking signals positive shifts in areas such as innovation capacity, infrastructure quality, and government efficiency, which are critical for attracting foreign direct investment and fostering entrepreneurship. The country’s progress in climbing the competitiveness ladder also highlights its increasing integration into global value chains and its ability to adapt to evolving economic challenges. Overall, Portugal’s improved position in the IMD World Competitiveness Ranking from 51st in 2013–2014 to 36th in 2024 illustrates a meaningful enhancement in its global economic standing and competitiveness.

A comprehensive study assessing the competitiveness of the 18 Portuguese district capitals was undertaken by a team of economics researchers affiliated with Minho University. This analysis employed the methodology established by the World Economic Forum, which is widely recognized for its rigorous approach to evaluating economic competitiveness at various geographic levels. The researchers applied this framework to capture a multifaceted picture of competitiveness across Portugal’s district capitals, considering numerous economic, infrastructural, and institutional indicators that influence a city’s capacity to foster sustainable growth and development. The findings of this competitiveness study were disseminated to the public through the Portuguese newspaper Público, with the results published on 30 September 2006. The publication of these results provided valuable insights into the relative economic strengths and weaknesses of Portugal’s district capitals, offering policymakers, business leaders, and academics a data-driven basis for understanding regional disparities and potential areas for improvement. The timing of the release was significant, as it allowed for reflection on regional competitiveness in the context of Portugal’s ongoing economic integration within the European Union and the global economy. According to the study, Évora emerged as the most competitive Portuguese district capital, securing the top position with a competitiveness score of 7,293. This score positioned Évora well ahead of its peers, reflecting a robust combination of factors such as economic dynamism, quality of infrastructure, institutional efficiency, and innovation capacity. Évora’s leading rank underscored its unique advantages, which may include a strategic location, historical heritage attracting tourism, and a diversified economic base that supports sustained competitiveness. Following Évora, Lisbon, the nation’s capital and largest city, attained second place with a competitiveness score of 6,454. Despite its status as the primary economic hub of Portugal, Lisbon’s score was notably lower than Évora’s, indicating that while it maintained substantial competitive strengths, there were areas where it did not outperform smaller district capitals. Lisbon’s position reflected its role as a financial and administrative center, with significant infrastructure and human capital resources, though it also suggested challenges such as urban congestion or regional disparities within the metropolitan area. Coimbra was ranked third in the competitiveness hierarchy, achieving a score of 6,042. Known for its historical university and cultural significance, Coimbra’s high ranking highlighted the importance of educational institutions and innovation ecosystems in driving regional competitiveness. The city’s score demonstrated a balanced performance across various competitiveness dimensions, including human capital development, technological readiness, and institutional framework, which collectively contributed to its strong economic position relative to other district capitals. Beja occupied the fourth position with a competitiveness score of 5,660, closely followed by Leiria in fifth place, which scored 5,609 points. Both cities showcased competitive profiles that reflected their regional economic roles and infrastructural capacities. Beja’s ranking suggested effective utilization of local resources and potential strengths in sectors such as agriculture and renewable energy, while Leiria’s proximity to industrial clusters and transport networks likely bolstered its competitiveness, enabling it to maintain a position near the top of the rankings. Castelo Branco was ranked sixth with a score of 5,608, narrowly trailing Leiria by a single point. This minimal difference underscored the competitiveness of both cities, with Castelo Branco’s performance reflecting its strategic initiatives in economic diversification and regional development. The close scores between these two district capitals indicated a competitive parity that may have been influenced by similar economic structures, demographic trends, and investment climates. Aveiro held the seventh position, achieving a competitiveness score of 5,452. The city’s ranking reflected its status as an important industrial and technological center, with strengths in sectors such as manufacturing, logistics, and education. Aveiro’s performance illustrated the impact of innovation and infrastructure development on regional competitiveness, as well as the benefits derived from its coastal location and port facilities. Guarda was ranked eighth, with a competitiveness score of 5,178. Situated in the interior of the country, Guarda’s position in the upper half of the rankings highlighted its relative economic resilience despite geographic challenges. Factors contributing to its competitiveness likely included local governance, investment in public services, and efforts to attract business development, which helped it maintain a solid standing among Portuguese district capitals. Santarém came in ninth place, scoring 5,037 points. The city’s ranking reflected its agricultural base and its role as a regional service center. Santarém’s competitiveness was supported by its proximity to Lisbon and its integration into regional transport networks, which facilitated economic activity and access to broader markets. Portalegre was positioned tenth with a competitiveness score of 4,711. Despite being ranked in the middle of the pack, Portalegre’s score indicated moderate competitiveness, with potential challenges related to economic diversification and infrastructural development. The city’s performance suggested the need for targeted policies to enhance its economic environment and improve its attractiveness for investment. Viseu ranked eleventh, scoring 4,628 points. The city’s position reflected a steady but less dynamic economic profile compared to higher-ranked capitals. Viseu’s competitiveness was likely influenced by its service sector, local industry, and quality of life factors, which contributed to a stable but modest economic environment. Interestingly, Vila Real was twelfth in the ranking, with a competitiveness score of 5,514 points. This score was notably higher than some cities ranked above it numerically, indicating a discrepancy between the ordinal ranking and the raw competitiveness scores. Vila Real’s relatively high score suggested strengths in specific competitiveness dimensions, such as human capital or innovation, which were not fully captured by its overall rank. This anomaly highlighted the complexity of measuring competitiveness and the importance of examining both scores and ranks for a nuanced understanding. Bragança was placed thirteenth with a score of 4,271, reflecting the challenges faced by this northeastern district capital in achieving higher competitiveness. Factors such as geographic isolation, limited industrial base, and demographic decline may have contributed to its lower score, underscoring the need for strategic interventions to stimulate economic growth and development. Setúbal ranked fourteenth, achieving a competitiveness score of 4,070. Despite its proximity to Lisbon and its industrial heritage, Setúbal’s position in the lower half of the rankings suggested structural economic challenges and potential issues related to urban development and environmental sustainability that affected its competitiveness. Braga was fifteenth with a competitiveness score of 4,055. Known for its historical and cultural significance, Braga’s lower ranking indicated that its economic performance and institutional framework were less competitive compared to other district capitals. This position pointed to opportunities for enhancing innovation, infrastructure, and business environment to improve its standing. Faro was ranked sixteenth, scoring 3,971. As the capital of the Algarve region, Faro’s lower competitiveness score was somewhat surprising given its importance as a tourism destination. This ranking suggested that despite tourism-related economic activity, other factors such as economic diversification, infrastructure, and institutional quality may have limited its overall competitiveness. Viana do Castelo held the seventeenth position with a score of 3,859. The city’s ranking reflected ongoing challenges in economic modernization and diversification, as well as infrastructural constraints. Viana do Castelo’s position highlighted the difficulties faced by some northern coastal cities in maintaining competitive economic environments amid broader regional disparities. Porto, traditionally recognized as one of Portugal’s major urban and economic centers, was ranked last among the 18 district capitals, occupying the eighteenth position with a competitiveness score of 3,577. This outcome was notable given Porto’s historical role as an industrial and commercial hub. The low ranking suggested significant competitive disadvantages at the time of the study, potentially linked to structural economic issues, infrastructural bottlenecks, or institutional inefficiencies that hindered its capacity to compete effectively relative to other district capitals. Porto’s position underscored the complex nature of regional competitiveness and the need for focused policy measures to address underlying challenges.

Portugal has long faced significant challenges related to the recurring destruction of its forests by large-scale wildfires. Each year, extensive areas of Portuguese woodland succumb to these fires, a phenomenon that is particularly prevalent in countries experiencing very hot summers combined with seasonal drying of soils and vegetation. The Mediterranean climate of Portugal, characterized by prolonged periods of drought and elevated temperatures during the summer months, creates an environment highly conducive to the ignition and rapid spread of forest fires. This annual devastation not only results in severe ecological damage, including loss of biodiversity and degradation of soil quality, but also exerts substantial economic repercussions. Many communities and industries in Portugal rely heavily on forestry-related activities such as timber production, cork harvesting, and resin extraction, all of which are directly undermined by the destruction of forested areas. Additionally, these fires pose grave public safety concerns, endangering lives, property, and infrastructure, and necessitating costly firefighting and emergency response efforts that strain local and national resources. By June 2017, Portugal’s national public debt had escalated to approximately 125% of its Gross Domestic Product (GDP), marking a critical juncture in the country’s economic trajectory. This level of indebtedness represented a substantial threat to Portugal’s economic stability and the financial sustainability of the State. The ballooning debt burden constrained the government’s fiscal flexibility, increasing vulnerability to external shocks and limiting its capacity to invest in growth-promoting sectors. Moreover, servicing such a high debt ratio required significant portions of public revenue to be allocated to interest payments, thereby reducing funds available for social programs, infrastructure development, and other essential public services. The elevated debt-to-GDP ratio also influenced Portugal’s standing in international financial markets, affecting borrowing costs and investor confidence, and necessitated stringent fiscal measures to restore economic balance. The Portuguese public sector has been widely characterized as excessively large, costly, and inefficient, with systemic issues that have persisted over several decades. One of the core problems identified was the overabundance of public employees, which contributed to inflated payroll expenses and diminished productivity. This surplus workforce, often referred to as excedentários, was symptomatic of a broader culture of bureaucratic redundancy, where overlapping responsibilities and cumbersome administrative procedures hindered effective governance. The inefficiencies embedded within the public sector resulted in annual financial losses amounting to millions of euros, draining public coffers and impeding economic progress. These structural weaknesses also fostered an environment where innovation and responsiveness were stifled, limiting the State’s ability to adapt to evolving societal and economic demands. Efforts to address these inefficiencies were notably undertaken between the XVI Governo Constitucional, led by Prime Minister José Durão Barroso, and the XVII Governo Constitucional, headed by Prime Minister José Sócrates. During this period, the Portuguese government initiated a series of reforms aimed at enhancing public sector efficiency and rationalizing resource allocation. Central to these reforms was the objective of reducing civil servant overcapacity by managing the population of excedentários, thereby streamlining the workforce and curtailing unnecessary expenditure. Simultaneously, the government sought to alleviate bureaucratic burdens imposed on citizens and businesses, recognizing that excessive red tape hindered economic dynamism and public satisfaction. These measures reflected a broader commitment to modernizing the State apparatus and fostering a more agile and cost-effective public administration. Several key reform initiatives were launched to operationalize these objectives. The empresa na hora program was designed to facilitate the rapid creation of companies by simplifying administrative procedures, thereby encouraging entrepreneurship and reducing barriers to business formation. The PRACE – Programa de Reestruturação da Administração Central do Estado represented a comprehensive restructuring effort targeting the central administration of the State, focusing on organizational redesign, workforce optimization, and process improvement. Complementing these efforts was the SIMPLEX – Programa de Simplificação Administrativa e Legislativa, which aimed to streamline administrative and legislative processes across various levels of government. SIMPLEX sought to reduce bureaucratic complexity, enhance transparency, and improve service delivery to the public. Collectively, these programs embodied a strategic approach to reforming the public sector through innovation, simplification, and efficiency gains. Despite the ambitious nature of these reform attempts, the so-called “public expenditure problem” remained a critical and unresolved issue in Portugal. By 2010, the country’s public debt and fiscal deficit had escalated uncontrollably, underscoring the limited tangible improvements achieved through the mid-2000s reform initiatives. The persistence of structural inefficiencies, coupled with external economic pressures such as the global financial crisis and the Eurozone sovereign debt crisis, exacerbated fiscal imbalances and undermined reform momentum. This failure to significantly curb public spending and improve administrative efficiency contributed to a loss of public confidence and heightened scrutiny from international financial institutions. The inability to effectively address the underlying causes of fiscal distress highlighted the complexity of reforming entrenched bureaucratic systems and the need for sustained political will and comprehensive policy measures. João Bilhim, who led the committee responsible for the 2005 Programme for Restructuring the State’s Central Administration (PRACE), publicly expressed disappointment regarding the limited success of the mid-2000s reforms. Bilhim’s reflections underscored the challenges encountered in implementing structural changes within the public sector, including resistance from vested interests, institutional inertia, and insufficient follow-through on reform commitments. His critique illuminated the gap between reform design and practical outcomes, emphasizing that while the programs introduced innovative concepts and frameworks, their execution often fell short of expectations. This candid assessment contributed to ongoing debates about the efficacy of public sector reforms in Portugal and the necessity of adopting more robust strategies to achieve meaningful transformation. Corruption has emerged as a significant political and economic issue in Portugal, with implications for governance, public trust, and economic development. According to Transparency International’s 2008 Corruption Perceptions Index, Portugal ranked 32nd out of 180 countries for the lowest perceived levels of corruption, indicating a relatively favorable position compared to many other nations. However, by 2012, the country experienced a slight decline, falling into a three-way tie for 33rd place. For comparative context, the United States ranked 18th and 19th in those respective years, reflecting a somewhat higher perception of integrity in public affairs. This shift in Portugal’s ranking suggested growing concerns about the prevalence and visibility of corrupt practices, which could undermine institutional credibility and deter investment. In response to the rising prominence of corruption as a political and economic challenge, Portuguese governmental authorities, civic associations, and think tanks have engaged in active efforts to prevent its further escalation. These initiatives encompass legislative reforms, enhanced enforcement mechanisms, public awareness campaigns, and the promotion of transparency and accountability within both public and private sectors. The multifaceted approach recognizes that combating corruption requires coordinated action across multiple domains, including judicial independence, media freedom, and civil society participation. These endeavors aim to strengthen democratic institutions, safeguard the rule of law, and foster an environment conducive to fair competition and ethical conduct. Common corruption practices in Portugal have been identified primarily within the expansive public sector and affiliated companies. These malpractices include abusive lobbying, wherein undue influence is exerted over public officials to secure favorable decisions or policies. Illicit concessions often involve the unauthorized or unethical granting of contracts, licenses, or privileges to specific entities, bypassing transparent competitive processes. Opaque approvals to contractors and economic groups further exacerbate the problem by obscuring the criteria and rationale behind public procurement and project authorization. Nepotistic job creation, characterized by the appointment of relatives or associates to public positions without meritocratic consideration, undermines institutional integrity and efficiency. Preferential commercial agreements distort market dynamics and entrench monopolistic or oligopolistic structures. Collectively, these practices erode public confidence and impede equitable economic development. Several high-profile corruption scandals have attracted widespread media attention in Portugal, involving a range of actors from local town hall officials to prominent businesspersons and politicians wielding broader authority. Among the most notable criminal cases is Face Oculta, a scandal that exposed extensive networks of corruption and illicit influence within government and corporate sectors. The case involving Isaltino Morais, the Mayor of Oeiras Municipality, highlighted issues of political corruption at the municipal level, including allegations of embezzlement and misuse of public funds. The Apito Dourado (Golden Whistle) scandal revealed corruption within Portuguese football, intertwining sports administration with broader political and economic interests. The Saco Azul de Felgueiras (Blue Bag of Felgueiras) case further exemplified corrupt practices in local governance, involving bribery and irregularities in public contracts. These scandals not only underscored systemic vulnerabilities but also galvanized public demand for greater transparency and accountability in Portuguese public life.

The Portuguese higher education system encompasses a wide array of institutions that confer academic degrees in economics and business management, with these programs distributed across the entire country. This extensive network includes universities and polytechnic institutes, both public and private, which collectively provide diverse educational opportunities in these fields. The accessibility of economics and business education throughout Portugal reflects the country’s commitment to fostering expertise in economic sciences and management, thereby supporting the development of a skilled workforce aligned with national economic needs. Management and administration programs are offered by nearly all Portuguese universities and polytechnic institutes, demonstrating the widespread availability of business education at various academic levels. These programs cover a broad spectrum of disciplines related to organizational leadership, strategic planning, human resources, and operational management, equipping students with practical and theoretical knowledge essential for effective business administration. The inclusion of polytechnic institutes alongside universities highlights the dual focus on both academic rigor and applied skills, catering to different student profiles and career aspirations within the business sector. Economics programs are available at all public universities in Portugal, ensuring a comprehensive public provision of economic education throughout the country. Additionally, several private universities also offer economics degrees, expanding the range of educational options available to students interested in economic theory, policy analysis, and quantitative methods. This widespread availability underscores the importance placed on economics as a core discipline within the Portuguese higher education landscape, reflecting the critical role of economic understanding in informing public policy and business strategy. Among the major and reputable universities with dedicated economics departments and active research programs in economics, several institutions stand out for their academic excellence and contributions to economic scholarship. The University of Lisbon hosts the Instituto Superior de Economia e Gestão (ISEG), which is recognized for its robust curriculum and research output in economics and business management. ISEG has a long-standing tradition of academic excellence and is considered one of the leading centers for economic studies in Portugal. ISCTE – Lisbon University Institute is another prominent institution offering comprehensive programs in economics and business. Known for its interdisciplinary approach, ISCTE integrates economics with social sciences and management studies, fostering a dynamic academic environment conducive to innovative research and practical applications. Its strategic location in Lisbon enhances its connections with public institutions and the private sector, facilitating collaborative projects and internships. The Portuguese Catholic University contributes significantly to the field through its Católica Lisbon School of Business and Economics and Católica Porto School of Economics and Management. Both schools are distinguished by their rigorous academic programs, international orientation, and strong emphasis on research. Católica Lisbon School of Business and Economics, in particular, has gained recognition for its high-quality teaching and research output, attracting students and faculty from around the world. The University of Porto, through its Faculdade de Economia, offers extensive programs in economics and business administration, supported by a vibrant research community. The faculty is known for its diverse academic offerings and active engagement in economic research, contributing to policy discussions and economic development initiatives at regional and national levels. Universidade Nova de Lisboa is represented by the Nova School of Business and Economics (NOVA SBE), which has established itself as a leading business school with a strong focus on economics and management education. NOVA SBE emphasizes internationalization, research excellence, and close ties with the business community, positioning itself as a key player in shaping economic thought and business practices in Portugal. Minho University’s Escola de Economia e Gestão provides comprehensive education and research in economics and management, emphasizing innovation and regional development. The school’s programs are designed to address contemporary economic challenges and promote sustainable growth, reflecting the university’s commitment to social responsibility and academic rigor. The University of Coimbra, through its Faculdade de Economia, maintains a long tradition of economic education and research. As one of the oldest universities in Portugal, it combines historical academic prestige with modern research initiatives, contributing to the advancement of economic sciences and the training of highly qualified professionals. The international reputation of Portuguese business and economics schools is further evidenced by their consistent presence in the Financial Times European Business School rankings. Both the Católica Lisbon School of Business and Economics and NOVA SBE have been regularly ranked among the top European business and economics schools, reflecting their academic quality, research impact, and graduate employability. These rankings underscore the global competitiveness of Portuguese institutions in the field of business education and their ability to attract international students and faculty. Beyond academic institutions, significant research on the Portuguese economy is conducted by public organizations such as the Bank of Portugal and Statistics Portugal. These institutions undertake extensive and systematic research, producing detailed reports and statistical analyses that provide valuable insights into the country’s economic performance, monetary policy, and socio-economic trends. The Bank of Portugal plays a crucial role in monitoring financial stability and economic developments, while Statistics Portugal offers comprehensive data collection and dissemination services, supporting evidence-based decision-making by policymakers, researchers, and businesses alike. Together, these organizations complement academic research and contribute to a deeper understanding of Portugal’s economic landscape.

In 2020, Portugal ranked as the second lowest among European Union member states in terms of the quality of housing, with only Cyprus exhibiting a poorer standard. This ranking highlighted significant challenges within the Portuguese housing sector, reflecting issues such as inadequate living conditions, poor maintenance, and insufficient access to modern amenities. The housing quality index is a critical measure of social welfare, as it directly affects health outcomes and overall quality of life. Portugal’s position near the bottom of this scale underscored the persistent difficulties faced by many households in securing adequate and dignified housing. Looking back to 2012, the socio-economic landscape of Portugal revealed that 45.4% of its population was at risk of poverty before the application of social transfers. This figure was slightly higher than the European Union average of 44.1% for the 27 member states at the time, excluding Croatia, which had not yet joined the EU. The at-risk-of-poverty rate before social transfers measures the proportion of individuals living below a certain income threshold prior to the mitigating effects of government interventions such as social security benefits, unemployment assistance, and family support. This elevated pre-transfer poverty rate indicated that nearly half of the Portuguese population faced significant financial vulnerability in the absence of state support. When pensions were incorporated into the calculation for 2012, the at-risk-of-poverty rate in Portugal experienced a substantial reduction, dropping to 25.2%. This sharp decrease demonstrated the critical role that pension payments played in alleviating poverty among the elderly and other vulnerable groups. Pensions provided a stable source of income that helped many individuals rise above the poverty threshold, thereby significantly improving their economic security. The inclusion of pensions in poverty assessments is essential for capturing a more accurate picture of social welfare, as it reflects the impact of retirement benefits on reducing income deprivation. Following the application of all social transfers in 2012, the proportion of the Portuguese population at risk of poverty further decreased to 17.5%. This figure represented those whose disposable income fell below the national at-risk-of-poverty threshold, which was defined as 60% of the national median income per adult equivalent. The threshold accounts for household size and composition, enabling a more precise measurement of poverty risk relative to the broader population’s income distribution. Portugal’s post-transfer poverty rate of 17.5% was marginally above the European Union average of 17%, indicating that while social policies had a notable impact, poverty remained a significant issue within the country. Comparatively, Portugal’s poverty rate after social transfers in 2012 was lower than that of several other Southern European countries, including Spain, Italy, and Greece. Spain’s rate stood at 22.2%, Italy’s at 19.4%, and Greece’s at 23.1%, all exceeding Portugal’s 17.5%. These disparities illustrated regional variations in economic resilience and the effectiveness of social protection systems across Southern Europe. Portugal’s relatively better performance suggested that its social safety nets, despite challenges, were somewhat more effective in mitigating poverty than those of its neighbors during this period. By January 2015, updated statistics reflecting the situation in 2013 revealed an increase in the at-risk-of-poverty rate after social transfers to 19.5%, equating to nearly two million people living under the poverty threshold. This rise marked a reversal of earlier gains and underscored the social impact of the economic crisis and austerity measures implemented in the preceding years. The increase in poverty rates highlighted the fragility of Portugal’s social protection mechanisms when confronted with prolonged economic downturns and fiscal constraints. Economist Carlos Farinha Rodrigues, affiliated with the Instituto Superior de Economia e Gestão (ISEG), commented on the social regression experienced by Portugal by 2013. He stated that the country had effectively lost a decade of social progress, reverting to levels of poverty and social deprivation comparable to those observed ten years earlier, around 2003. This assessment emphasized the severity of the economic crisis’s impact on social indicators and the challenges faced in reversing the negative trends in poverty and inequality. The 2013 risk of poverty after social transfers exhibited significant variation across different demographic groups. Among men, the rate was 18.9%, while women experienced a slightly higher rate of 20%. Children were particularly vulnerable, with 25.6% living at risk of poverty. Monoparental families with at least one child faced an especially high poverty risk of 38.4%, reflecting the economic difficulties encountered by single-parent households. In contrast, two-parent families with one child had a lower risk rate of 15.4%, indicating the relative economic advantage of dual-parent households. Other household aggregates with children, such as elderly households caring for minors, experienced a poverty risk rate of 28.8%. These disparities highlighted the intersection of family structure, age, and gender in shaping poverty vulnerability. To address potential distortions caused by income decreases during the economic crisis, the National Statistics Institute (Instituto Nacional de Estatística, INE) conducted an alternative poverty risk calculation using a fixed poverty line based on 2009 income levels. This methodological approach aimed to provide a clearer picture of poverty trends unaffected by the general decline in incomes. Using this fixed poverty line, the poverty rate increased markedly from 17.9% in 2009 to 25.9% in 2013. This substantial rise underscored the deepening economic hardship experienced by the population during the crisis years, revealing a more pronounced deterioration in living standards than suggested by relative poverty measures alone. In response to the 2013 poverty figures, Portuguese Prime Minister Pedro Passos Coelho asserted that the statistics did not accurately reflect the current situation at the time of his statement. His remarks suggested a belief that the government’s policies and economic recovery efforts were beginning to ameliorate poverty conditions, despite the official data indicating otherwise. This divergence between political statements and statistical evidence reflected the complexity of measuring and addressing poverty during periods of economic transition. By 2022, poverty in Portugal had once again increased, affecting 17% of the population across all age groups, according to data released by the INE. This resurgence indicated that despite periods of improvement, poverty remained a persistent challenge within Portuguese society. The uniform impact across age groups suggested widespread economic vulnerability, affecting children, working-age adults, and the elderly alike. The increase in poverty rates in 2022 occurred against a backdrop of global economic uncertainty and domestic challenges, including inflationary pressures and labor market shifts. Homelessness in Portugal experienced a dramatic rise over a four-year period leading up to 2022, with the number of homeless individuals increasing by 78%. The total reached 10,773 people in 2022, up from 6,044 in 2018. This sharp increase highlighted the growing difficulties faced by vulnerable populations in securing stable housing and the limitations of social services in addressing homelessness. The surge in homelessness was symptomatic of broader socio-economic issues, including rising housing costs, unemployment, and inadequate social support systems. The trajectory of Portugal’s poverty rate from 1995 to 2023 exhibited notable fluctuations. Beginning at 23.0% in 1995, the rate gradually declined over the following decades, reaching a low of 16.2% in 2019. However, this downward trend was interrupted in 2020, when the poverty rate rose to 18.4%, likely influenced by the economic and social disruptions caused by the COVID-19 pandemic. Subsequently, the rate stabilized around 16.6% in 2023, indicating a partial recovery but persistent challenges in eradicating poverty. Detailed annual poverty rates during this period were as follows: 23.0% in 1995, 22.0% in 1997, 21.0% in 1999, 20.0% in 2001, 20.4% in 2003, 18.5% in both 2005 and 2007, 17.9% in 2009 and 2011, 19.5% in 2013, 19.0% in 2015, 17.3% in 2017, 16.2% in 2019, 18.4% in 2020, 16.4% in 2021, 17.0% in 2022, and 16.6% in 2023. These figures illustrate the dynamic nature of poverty in Portugal, influenced by economic cycles, policy interventions, and external shocks. The overall trend reflects a gradual improvement over the long term, punctuated by setbacks during periods of economic crisis and social upheaval.

The National Health Survey conducted in Portugal during 2005 and 2006 provided critical insights into the state of food security across the country, highlighting the pronounced vulnerability of lower-income households. Data collected revealed that households with a monthly income ranging between 251 and 500 euros accounted for 37.3% of the population experiencing food insecurity. This disproportionate representation underscored the strong correlation between limited financial resources and the inability to consistently access sufficient, safe, and nutritious food. In contrast, households earning more than 901 euros per month comprised only 15.9% of the food insecure population during the same period, indicating a markedly lower incidence of food insecurity among higher-income earners. These findings illustrated the economic gradient of food insecurity in Portugal, where income levels significantly influenced the likelihood of facing food-related hardships. The period following the Portuguese financial crisis, which spanned from 2010 to 2014, witnessed a notable escalation in food insecurity, with the most severe effects concentrated in economically disadvantaged regions such as Alentejo and Algarve. The crisis, characterized by austerity measures, rising unemployment, and reduced social spending, exacerbated existing vulnerabilities and deepened food insecurity among already marginalized populations. The Algarve region, in particular, experienced a dramatic increase in food insecurity indicators between 2011 and 2012. Total food insecurity in Algarve surged from 56.9% in 2011 to an alarming 77.1% in 2012, reflecting a substantial deterioration in households’ ability to secure adequate food. More strikingly, severe food insecurity in the region escalated from 13.2% to 41.7% over the same period, signaling a critical intensification in the severity of food deprivation faced by many families. Despite these regional spikes, the national picture of food insecurity during this timeframe exhibited only a marginal increase. Across Portugal, the prevalence of food insecurity rose slightly by 0.5%, moving from 48.6% in 2011 to 49.1% in 2012. This relatively stable national figure suggested that the financial crisis’s impact on food security was not uniformly distributed throughout the country but rather manifested more acutely in specific areas. Regions such as Centro and Norte, which initially reported lower levels of severe food insecurity, experienced only modest increases of approximately 3% during this period. These regional disparities highlighted the uneven socio-economic consequences of the crisis, with poorer and more vulnerable locales bearing the brunt of food insecurity while others maintained comparatively stable conditions. From 2011 to 2013, the overall prevalence of food insecurity in Portugal remained nearly constant, yet the burden of this hardship was disproportionately shouldered by economically disadvantaged and poorer regions. While some areas demonstrated resilience or even slight improvements, the persistence of high food insecurity rates in regions like Alentejo and Algarve underscored the entrenched nature of socio-economic inequalities. The crisis period thus accentuated pre-existing disparities, with food insecurity becoming an increasingly pressing issue for those already facing economic hardship. This uneven distribution of food insecurity emphasized the need for targeted policy interventions aimed at alleviating poverty and improving access to food in the most affected regions. In more recent years, food insecurity has continued to affect a significant portion of the Portuguese population. Data from 2020 and 2022 indicated that over 12% of residents experienced moderate or severe food insecurity, a figure that exceeded the Southern European average of 8.5%. This elevated rate positioned Portugal among the countries in the region facing considerable challenges in ensuring food security for its population. When compared to thirteen Southern European countries, Portugal ranked sixth in terms of the percentage of people confronting moderate or severe food insecurity. The countries with higher rates included Albania at 30.2%, North Macedonia at 24%, Serbia at 14.8%, Bosnia and Herzegovina at 13.4%, and Montenegro at 12.9%. Portugal’s position within this ranking reflected persistent socio-economic vulnerabilities that continued to affect food access despite broader European trends. The persistence of food insecurity in Portugal, particularly among lower-income groups and certain geographic regions, has underscored the complex interplay between economic conditions, social policies, and regional disparities. The data from the mid-2000s through the early 2020s illustrate how economic crises and structural inequalities have shaped the landscape of food security in the country. While national averages may mask localized hardships, the concentration of food insecurity in poorer areas and among vulnerable populations remains a critical concern for policymakers and social welfare programs. Efforts to address these challenges have required a multifaceted approach, encompassing income support, food assistance programs, and initiatives aimed at reducing poverty and social exclusion, particularly in regions most affected by economic downturns.

In 2021, the United Nations undertook a significant revision of its estimates regarding the Portuguese diaspora, adjusting the previously reported number of Portuguese nationals living abroad. The earlier figure, which stood at approximately 2.6 million in 2020, was lowered to around 2 million following a reassessment of migration data and demographic trends. This downward revision reflected more accurate accounting methods and updated migration records, which took into consideration factors such as return migration, naturalizations in host countries, and changes in data collection methodologies. As a result of this adjustment, Portugal was positioned as the 20th country worldwide in terms of the number of emigrants relative to its resident population, highlighting the substantial scale of its diaspora in proportion to its domestic population size. Despite the global disruptions caused by the COVID-19 pandemic, 2021 marked a notable resurgence in Portuguese emigration, with numbers surpassing pre-pandemic levels. The easing of travel restrictions and the gradual recovery of labor markets in destination countries contributed to this increase. Emigration flows were particularly pronounced toward Northern European countries, with Belgium and the Netherlands emerging as prominent destinations for Portuguese migrants. These countries offered a combination of economic opportunities, established Portuguese communities, and relatively accessible labor markets, which attracted a new wave of emigrants seeking employment and improved living conditions. This shift in migration patterns underscored a diversification of Portuguese emigration beyond traditional destinations. Among the countries hosting Portuguese emigrants, France, Switzerland, and the United Kingdom stood out not only for their sizeable Portuguese populations but also as the primary sources of remittances sent back to Portugal. These three countries had long been favored destinations due to historical ties, linguistic and cultural connections, and robust labor markets that absorbed Portuguese workers across various sectors. The remittances sent from these countries played a crucial role in supporting families and communities in Portugal, contributing significantly to the national economy. In 2022, emigrants residing in France, Switzerland, and the United Kingdom collectively accounted for more than half of the total remittances received by Portuguese households, underscoring their continued economic importance to the homeland. Data from the Bank of Portugal further illuminated the dynamics of remittance flows, revealing that in 2021, the total amount of remittances sent by Portuguese emigrants increased by 1.8% compared to the previous year. This growth pushed the total remittance volume beyond 3 billion euros, marking a substantial financial inflow that bolstered household incomes and supported consumption and investment in Portugal. The steady rise in remittances despite the challenges posed by the pandemic highlighted the resilience of the Portuguese diaspora and its enduring economic ties to the country. Portugal’s position within the European Union was notable, as it ranked among the member states receiving the highest amounts of remittances from its emigrant population, reflecting both the size of its diaspora and the strength of transnational economic linkages. The interplay between emigration patterns and remittance flows illustrated broader trends in Portugal’s economic emigration. The revised diaspora estimates and increased emigration to Northern Europe signified evolving migration routes and demographic shifts within the Portuguese expatriate community. Meanwhile, the sustained prominence of France, Switzerland, and the United Kingdom as remittance hubs emphasized the persistence of established migration corridors and the centrality of these countries in the financial support networks of Portuguese emigrants. The cumulative effect of these factors underscored the multifaceted nature of Portugal’s economic emigration and its significant impact on both the emigrants themselves and the socioeconomic fabric of Portugal.