Economy of Portugal

Portuguese Colonial Empire

During the Portuguese Empire period, started in the 15th century, until the Carnation Revolution of 1974, the economy of Portugal was centered in trade and raw materials related activities within its vast colonial possessions, mainly in Asia (spices, silk, dyes, porcelain and gems), Africa (ivory, timber, oil, diamonds and slaves) and South America (sugar cane, dyes, woods, and gold).

Portugal’s GDP per capita was at or above the level of other Western European countries until it began to decline in the mid-18th century—a downturn that historians now attribute to a “Dutch Disease” effect from the influx of gold from Brazil, leading to diminished exports and deindustrialization. It would not recover until the 20th century.

In 1822, the Portuguese colony of Brazil became an independent country, however, until 1974, Portugal managed to preserve its colonies/overseas territories in Africa, which included Angola and Mozambique, territories that would experience reasonable rates of economic growth until the departure of the Portuguese in 1975.

The economy of Portugal and its overseas territories on the eve of the Carnation Revolution (a military coup on 25 April 1974) was growing. Average family purchasing power was rising together with new consumption patterns and trends and this was promoting both investment in new capital equipment and consumption expenditure for durable and nondurable consumer goods. The Estado Novo regime economic policy encouraged and created conditions for the formation of large business conglomerates.

The regime maintained a policy of corporatism that resulted in the placement of a large part of the Portuguese economy in the hands of a number of strong conglomerates, of which, the most important were known as the "seven magnificent". These Portuguese conglomerates had a business model with similarities to South Korean chaebols and Japanese keiretsus and zaibatsus. Among the biggest conglomerates were those founded and held by the families Champalimaud, Mello (CUF group), Amorim and Santos (Jerónimo Martins group).

The CUF (Companhia União Fabril) group was the largest and most diversified of the Portuguese conglomerates. At one point, it became the largest industrial group in the Iberian Peninsula and one of the five largest in Europe. Its core businesses included the cement, chemicals, petrochemicals, agrochemicals, textiles, beer, beverages, metallurgy, naval engineering, electrical engineering, insurance, banking, paper, tourism and mining. Its main business activities and corporate headquarters located in mainland Portugal, but it also included branches, plants and several developing business projects all around the Portuguese overseas territories, especially in Angola and Mozambique.

Other medium-sized family companies specialized in textiles (for instance those located in the city of Covilhã and the northwest), ceramics, porcelain, glass and crystal (like those of Alcobaça, Caldas da Rainha and Marinha Grande), engineered wood (like SONAE near Porto), canned fish (like those of Algarve and the northwest which included one of the oldest canned fish companies in continuous operation in the world), fishing, food and beverage producing, tourism (well established in Estoril/Cascais/Sintra (the Portuguese Riviera) and growing as an international attraction in the Algarve since the 1960s) and in agriculture and agribusiness (like the ones scattered around Ribatejo and Alentejo – known as the breadbasket of Portugal, as well as the notorious Cachão Agroindustrial Complex established in Mirandela, Northern Portugal, in 1963) completed the panorama of the national economy by the early 1970s. In addition, rural areas' populations were committed to agrarianism that was of great importance for a majority of the total population, with many families living exclusively from agriculture or complementing their salaries with farming, husbandry and forestry yields.

The overseas territories of Angola and Mozambique (the largest Portuguese Overseas Provinces at the time) were internationally notable centres of production of oil, coffee, cotton, cashew, coconut, timber, minerals (like diamonds), metals (like iron and aluminium), banana, citrus, tea, sisal, beer, cement, fish and other sea products, beef and textiles.

Labour unions were not allowed and a minimum wage policy was not enforced. However, in a context of an expanding economy, bringing better living conditions for the Portuguese population in the 1960s, the outbreak of the colonial wars in Africa set off significant social changes, among them the rapid incorporation of more and more women into the labour market. Marcelo Caetano moved on to foster economic growth and some social improvements, such as the awarding of a monthly pension to rural workers who had never had the chance to pay social security.

The objectives of Caetano's pension reform were threefold: enhancing equity, reducing fiscal and actuarial imbalance, and achieving more efficiency for the economy as a whole, for example, by establishing contributions less distortive to labour markets or by allowing the savings generated by pension funds to increase the investments in the economy.

1974

The post Carnation Revolution period was characterized by chaos and negative economic growth as industries were nationalised and the negative effects of the decoupling of Portugal from its former colonies were felt. Heavy industry came to an abrupt halt. All sectors of the economy from manufacturing, mining, chemical, defence, finance, agriculture and fishing went into free fall.

Portugal experienced several years of negative growth. This was amplified by the mass emigration of skilled workers and entrepreneurs due to political intimidation, and the costs of accommodating in Portugal thousands of refugees from the former overseas provinces in Africa – the retornados.

After the Carnation Revolution's turmoil of 1974, the Portuguese economic basis changed deeply. The Portuguese economy had changed significantly by 1973 prior to the leftist military coup, compared with its position in 1961 – total output (GDP at factor cost) had grown by 120 percent in real terms. After the Carnation Revolution military coup of 1974, by abandoning its moderate-reformist, pro-democracy posture, the Movimento das Forças Armadas leadership set out on a course of sweeping nationalizations and land expropriations during a period known as PREC. Wide powers were handed over to the working class always having the concept of dictatorship of the proletariat in mind.

In 1960, Portugal's per capita GDP was only 38 percent of the EC-12 average. After Salazar's late shift in economic policy toward a more outward-looking, economically liberal direction due to the influence of a new generation of technocrats with background in economics and technical-industrial know-how, by the end of the Salazar period, in 1968, it had risen to 48 percent; and in 1973, on the eve of the revolution, Portugal's per capita GDP had reached 56.4 percent of the EC-12 average. In 1975, the year of maximum revolutionary turmoil, Portugal's per capita GDP declined to 52.3 percent of the EC-12 average. Convergence of real GDP growth toward the EC average occurred as a result of Portugal's economic resurgence since 1985. In 1991 Portugal's GDP per capita climbed to 54.9 percent of the EC average, exceeding by a fraction the level attained just during the worst revolutionary period. Portugal overtook Greece in terms of GDP per capita in 1992, but fell again below it in 1993. This situation endured until 2013 when Greece was more hardly hit by economic fallout from debt crisis.

The growth rate of Portuguese merchandise exports during the period 1959 to 1973 was notable – 11 percent per annum. In 1960 the bulk of exports was accounted for by a few products – canned fish, raw and manufactured cork, cotton textiles, and wine. By contrast, in the early 1970s (before the 1974 military coup), Portugal's export list reflected significant product diversification, including both consumer and capital goods. Several branches of Portuguese industry became export-oriented, and in 1973 over one-fifth of Portuguese manufactured output was exported.

There was a 16-percentage-point increase in the participation of the services sector from 39 percent of GDP in 1973 to 55.5 percent in 1990. Most of this growth reflected the exacerbated proliferation of civil service employment and the associated cost of public administration, together with the contribution of tourism services during the 1980s to the detriment of more sustainable and reproductive activities like manufacturing, exporting and technology/capital-intensive industries.

EU membership (1986)

Membership in the European Communities, achieved in 1986, contributed to stable economic growth and development, largely through increased trade ties and an inflow of funds allocated by the European Union (and before that the European Communities) to improve the country's infrastructure.

Although the occurrence of economic growth and a public debt relatively well-contained as a result of the number of civil servants has been increased from 485,368 in 1988 to 509,732 in 1991, which was a much lower increase than that which will happen in the following years until 2005 marked by irrational and unsustainable State employment, from 1988 to 1993, during the government cabinets led by then Prime Minister Aníbal Cavaco Silva, the Portuguese economy was radically changed. As a result, there was a sharp and rapid decrease in the output of tradable goods and a rise of the importance of the non-tradable goods sector in the Portuguese economy. After a recession in 1993, the economy grew at an average annual rate of 3.3%.

In order to qualify for the Economic and Monetary Union (EMU), Portugal agreed to cut its fiscal deficit and undertake structural reforms. The EMU brought to Portugal exchange rate stability, falling inflation, and falling interest rates. Falling interest rates, in turn, lowered the cost of public debt and helped the country achieve its fiscal targets.

In 1999, it continued to enjoy sturdy economic growth, falling interest rates, and low unemployment. The country qualified for the Economic and Monetary Union of the European Union (EMU) in 1998 and joined with 10 other European countries in launching the euro on 1 January 1999. The three different designs chosen for the national side of the Portuguese euro coins were drawn by the artist Vitor Manuel Fernandes dos Santos. The inspiration came from the three seals of the first king, Dom Afonso Henriques. Portugal's inflation rate for 1999, 2.3%, was comfortably low.

Household debt expanded rapidly. The European Commission, OECD, and others advised the Portuguese Government to exercise more fiscal restraint. Portugal's public deficit exceeded 3% of GNP in 2001, the EU's self-imposed limit, and left the country open to either EU sanctions or tighter financial supervision. The overall rate of growth slowed in late 2001 and into 2002, making fiscal austerity that much more painful to implement.

Portugal made significant progress in raising its standard of living to that of its EU partners. GDP per capita on a purchasing power parity basis rose from 51% of the EU average in 1985 to 78% in early 2002. By 2005 this had dropped to 72% (of the average across all of now 25 EU members, including seven with GDP per capita lower than Portugal) as GDP per capita rose in other EU countries. Unemployment stood at 4.1% at the end of 2001, which was low compared to the EU average.

GDP growth in 2006, at 1.3%, was the lowest not just in the European Union but in all of Europe. In the 2000s, the Czech Republic, Malta and Slovenia overtook Portugal in terms of GDP per capita. From 2010 until 2012, GDP per capita (PPP) in Portugal fell below those of Slovakia (in Europe) and Seychelles (outside Europe). In 2013 it was estimated that the Portuguese GDP per capita will be similar (within minus or plus US$1,000 per capita) of those of Greece, Estonia and Lithuania. The GDP per capita fell from just over 80% of the EU 25 average in 1999 to just over 70% in 2007. This poor performance of the Portuguese economy was explored in April 2007 by The Economist which described Portugal as "a new sick man of Europe".

From 2002 to 2007, the unemployment rate increased 65% (270,500 unemployed citizens in 2002, 448,600 unemployed citizens in 2007). In December 2009, ratings agency Standard and Poor's lowered its long-term credit assessment of Portugal to "negative" from "stable", voicing pessimism on the country's structural weaknesses in the economy and weak competitiveness that would hamper growth and the capacity to strengthen its public finances and reduce debt.

However, the Portuguese subsidiaries of large multinational companies ranked among the most productive in the world, including Siemens Portugal, Volkswagen Autoeuropa, Qimonda Portugal (before the parent company filed for bankruptcy), IKEA, Nestlé Portugal, Microsoft Portugal, Unilever/Jerónimo Martins and Danone Portugal.

Many Portuguese companies have grown and expanded internationally since after 1986. Among the most notable Portugal-based global companies are SONAE, Amorim, Sogrape, EFACEC, Portugal Telecom, Jerónimo Martins, Cimpor, Unicer, Millennium bcp, Lactogal, Sumol + Compal, Delta Cafés, Derovo, Critical Software, Galp Energia, EDP, Grupo José de Mello, Sovena Group, Valouro, Renova, Teixeira Duarte, Soares da Costa, Portucel Soporcel, Simoldes, Iberomoldes, Logoplaste and TAP Portugal

Portuguese financial crisis (2010–2013)

The Portuguese Financial crisis was a major political and economic crisis, related with the European sovereign debt crisis and its heavy impact in Portugal. The crisis started to be noted in the initial weeks of 2010 and only began to fade away with the start of the Portuguese economic recovery in the late 2013. It was the Portuguese economy's most severe recession since the 1970s.

A report published in January 2011 by the Diário de Notícias, a leading Portuguese newspaper, demonstrated that during the period of the Carnation Revolution, from 1974 to 2010, the Portuguese democratic governments have encouraged over-expenditure and investment bubbles through unclear public-private partnerships. Consequently, numerous ineffective external consultancy/advising committees and firms were funded, and this facilitated considerable slippage in state-managed public works, inflated top management and head officers' bonuses and wages. Additionally, a recruitment policy eventuated that has boosted the number of redundant public servants.

For almost four decades, the nation's economy has also been damaged by risky credit, public debt creation, and mismanaged European structural and cohesion funds. Apparently, Prime Minister Sócrates's cabinet was unable to forecast or prevent the crisis when symptoms first appeared in 2005, and was later incapable of doing anything to ameliorate the situation when the country was on the verge of bankruptcy in 2011. In 2010, acronyms like PIIGS were widely used by international bond analysts, academics, and the international financial press when referring to the underperforming economies of Portugal, Italy, Ireland, Greece and Spain. The number of civil servants had increased from 509,732 to 727,701 between 1991 and 2011.

Four factors that heavily contributed to the financial crisis were:

• The financial collapse of Banco Português de Negócios (BPN) due to a huge amount of toxic credits conceded by the bank in exchange of promises of illegal gains to the administrators, like corporate positions or the acquisitions of assets previously detained by them. The government nationalized the bank in November 2008 and, according to the BPN Inquiry Commission, until 2012, the nationalization of the bank cost 3405 million Euros to the State. In 2010 alone, the bank had an impact of 1803 million Euros in the public accounts, which was equivalent to 1.2% of the GDP.
• The bankruptcy of the bank Banco Privado Português (BPP), which entailed large costs for the State. This bank was dissolved by Banco de Portugal in April 2010. In 2010 alone, the BPP cost 450 million euros to the taxpayers, consisting in guarantees driven by the State in that year.
• The budgetary slippage with the Public–private partnerships (PPPs): between 2008 and 2010 the accounts slipped 560.2 million euros, mainly due to the rents paid to road concessions, to which were paid more 425.5 million euros than it was budgeted. In 2011 the slippage in the rents with the road concessions rose 28% to 197.4 million euros above what was budgeted and rose 42.3% to 266.3 million euros above what had been forecasted for 2010. The State spent a total of 896.6 million euros in rents to the road concessions. The rents paid to the PPPs in the health and rail sectors also slipped considerably.
• The Swaps contracted by State-owned businesses with potential losses higher than 3000 million euros. In 2013, the Portuguese government reserved 898 million euros in the Amending Government Budget to bear the costs of the settlement of these contracts, so those companies can pay the accumulated losses to the financial institutions with which they contracted those swaps. The recipient firms of that support are the Lisbon Metro (548 million euros), the Porto Metro (315 million euros), REFER, whose administrator in the time when those contracts were approved is the former Finance Minister of Portugal, Maria Luís Albuquerque (20 million euros) and Estradas de Portugal (15 million euros).

In April 2011, Portugal confirmed the receipt of a financial bailout from the IMF and the European Union worth €78 billion ($115 billion, £70 billion), following Greece and the Republic of Ireland. Some senior German policymakers publicly stated that emergency bailouts for Greece and future EU aid recipients should be accompanied by harsh penalties, which caused social unrest in Ireland and across Southern European countries, germanophobia, a big increase of euroscepticism and the rise of far-left and far-right parties in Greece (namely SYRIZA, Golden Dawn, among others), as well as the eurosceptic Five Star Movement and Lega Nord in Italy.

In May 2007, 65% of the Portuguese tended to trust the EU institutions while 24% tended not to trust them. On the other hand, in November 2012, only 34% tended to trust them, while 59% tended not to trust them (even so, less extreme than Greece or Spain, where 81% and 72% tended not to trust them, respectively). Partly as a result of this disappointed attitude concerning the EU, Portugal has started to close ties with Africa, Brazil as well as with other Latin American countries, China, USA, Switzerland and other parts of the world, which has been reflected both in the investments, in foreign trade, and even in emigration.

The three-year EU aid program incorporating the €78 billion support package ended in May 2014. At the time the Portuguese government reaffirmed its commitment to continue its economic reform, declaring that while the bailout had allowed the country to put its economy back on track, it still faced significant challenges.

Resumption of Portuguese economic growth (2014–present)

The year of 2014 marked the start of the recovery of the Portuguese economy. Since the third quarter of 2014, the Portuguese economy has been steadily expanding, with a GDP growth of 0.4% quarterly and 1.5% yearly registered in the second quarter of 2015. The economic recovery has been accompanied by a continuous fall in the unemployment rate (8.5% in the third quarter of 2017, from a high of 17% in 2012). The Government budget deficit has also been reduced from the 11.2% of GDP in 2010 to 4.8% in 2014.

The International Monetary Fund issued an update report in late June 2017 with some positive news including a stronger near-term outlook and an increase in investments and exports. Because of a surplus in 2016, the country was no longer bound by the Excessive Deficit Procedure. The banking system was more stable, although there were still non-performing loans and corporate debt. The IMF recommended working on solving these problems for Portugal to be able to attract more private investment. "Sustained strong growth, together with continued public debt reduction, would reduce vulnerabilities arising from high indebtedness, particularly when monetary accommodation is reduced."

By 2021, Portugal's GDP (PPP) was $36,381 per capita, according to OECD's report. It was the 4th lowest GDP per capita (PPP) of the eurozone out of 19 members, and the 8th lowest of the European Union out of 27 member-states, with several former economically disadvantaged Communist Bloc countries which in the meanwhile had become Eastern European member-states of the EU, nearly reaching or surpassing Portugal in terms of GDP (PPP) per capita around this date. Also in 2021, labour productivity (PPP) was the fifth lowest among the 27 member-states of the European Union (EU) and was 35% lower than the EU average. By 2022, the Portuguese productivity of labour had fallen to the fourth lowest position among the 27 member-states of the European Union with only Bulgaria and Greece being clearly inferior to Portugal in that parameter.

At this stage, Portugal had been a net beneficiary to the European Union budget since it joined the union, then known as EEC, in 1986.

Portugal's GDP growth rate recorded the highest increase in the EU for the fourth quarter of 2024 as a percentage change compared with the previous quarter of 2024, according to Eurostat, with +1.5%. Moreover, while GDP per capita increased in 21 out of 27 countries across Europe, Portugal ranked 5th with an increase in the quarterly real GDP per capita of 0.68% in 2024.

Portugal also ranks 2nd highest growth in household income rising by 6.7% and therefore surpassing the OECD average of 0.9%. According to the figures published in January 2024, by Banco de Portugal, Portugal’s Central Bank, Portugal's debt-to-GDP ratio is declining. Portugal’s total net debt vis-à-vis the rest of the world decreased from 85.4% of GDP in June 2023 to 82.7% of GDP in September 2023.

Portugal’s budget surplus exceeded forecasts by 1 billion euros for the year 2023. Portugal achieved a historic budget surplus of 1.2% of the Gross Domestic Product (GDP) for the year 2023, exceeding the target of 0.8% that was expected to reach 2,191 million euros. The country also ranks 6th EU country with the highest Gold Reserves by value in euros in 2025, since in Q4 2024, the country holds 382.66 tonnes of gold valued at nearly 35 billion euros.

Government expenditure by function

According to Eurostat in 2024, the General Government expenditure by main function, as a percentage of Total Expenditure, was as follows (compared to the Eurozone and EU averages):

Also according to Eurostat in 2024, the General Government expenditure by three of the main functions, as a percentage of GDP, was as follows (compared to the Eurozone and EU averages):

According to these data, in 2024, Portugal did not present any overspending neither on the coverage of social risks (social protection and health) and the slightly high spending on education can be related to a lag between the average qualifications of Portuguese and their European counterparts, resulting in an eventual attempt to overcome that lag. There has been significant progress towards that objective, since the school dropout rate fell from 43.6% in 2000 to 8.0% in 2023, with Portugal going from the top positions in 2000 to 13th in 2023 and below the EU average.

Evolution of the number of public employees in Portugal (1968–present)

^A All data refer to 31 December of the respective year, except 1996 (which refer to 1 October).
^B Data for 1986, 1988 and 1991 were obtained by estimates from internal surveys and exclude military and militarized personnel and public employees in the Azores and Madeira islands.
^C Data for 2010 is an estimate made in October 2010 for the State Budget 2011.

In 2023, around 15% of jobs, as a percentage of the workforce, were employed in the General Government, as opposed to an average of 18.4% in the OECD.

Wages

The minimum monthly wage in Portugal is 920 euros (from January 1, 2026), having been previously set at 870 euros. The current minimum wage was established in December 2025, with the goal of reaching 1020 euros by 2028. The minimum wage has been increasing since 2015, when it stood at 505 euros. The annual median disposable income was $19,147 in year 2021 (PPP). The average gross wage is 1835 euros (US$2126, nearly the same as Croatia and Poland), and the average net wage is 1342 euros (US$1555) by the second quarter of 2026. All wages are paid 14 times a year, twelve monthly salary payments plus one month's pay in the form of a Christmas bonus and one month for a holiday bonus.

The Portuguese minimum wage, according to article 273 of the Labor Code, is set after dialogue and negotiations in the Permanent Social Conciliation Commission, whose value includes the Government and the Employers' Confederations and Trade Union Confederations. Minimum and average monthly wages by population employed by others, after income taxes:

Graduate unemployment

In 2008, about 8% of the people with a degree were unemployed, and a much larger proportion was underemployed. This was directly correlated with a general lack of employability and a student's under-preparation for the workplace that was seen among many courses in a number of fields that were offered by certain higher education institutions or departments. The implementation of the Bologna process and other educational reforms, such as the compulsory closing of a number of courses, departments, colleges and private universities after 2005 due to a lack of academic rigour and low teaching standards, was a completely new approach to tackle the problem.^{[citation needed]} Since then, working population with a college degree has seen a constant increase, up 33.7% by 2024, still the 8th worst in the EU, while young working population (between the ages of 25 and 34 years old) with a college degree reached 43% in 2024, basically on pair with the EU's average, but with household costs and public funding systems still diverging from other members of the community.

Poverty prevention

Natural resources

Forests are the major natural resource of Portugal, covering about 34% of the country. The most important forest resources are the pine trees (13,500 km²), cork oaks (6800 km²), holm oaks (5,340 km²), and eucalyptus (2,430 km²). Cork is a major production, with Portugal producing half of the world's cork. Significant mining resources are lithium, tungsten, tin, and uranium.

Agriculture

By 2024, the Agriculture sector in Portugal represented 2.9% of Gross Domestic Product. The country's total agricultural land corresponds to an area of approximately 3,697,000 ha (36,970 km²) as of 2023.

Despite presently representing only a small percentage of the economy, a considerable part of continental Portugal is dedicated to agriculture. The South has developed an extensive monoculture of cereals and olive trees and the Douro Valley of vineyards. Olive trees (4,000 km²; 1,545 sq mi), vineyards (3,750 km²; 1,450 sq mi), wheat (3,000 km²; 1,160 sq mi) and maize (2,680 km²; 1,035 sq mi) are produced in vast areas. Portuguese wine and olive oil are especially praised by nationals for their quality, thus external competition (even at much lower prices) has had little effect on consumer demand.

Portugal is a traditional wine grower, and has exported its wines since the dawn of western civilization; Port Wine, Vinho Verde and Madeira Wine are the leading wine exports. Portugal is also a quality producer of fruits, namely the Algarve oranges, cherries (large production in Cova da Beira and Alto Alentejo), Oeste region's pêra rocha (a type of pear) and Alcobaça’s apples (maçã de Alcobaça). More recently, niche crops such as blueberry and raspberry have seen great increase in production, mainly for exporting. Other exports include horticulture and floriculture products, beet sugar, sunflower oil, cork, and tobacco.

Fisheries

The Portuguese fishing industry is fairly large and diversified. Fishing vessels classified according to the area in which they operate, can be divided into local fishing vessels, coastal fishing vessels and long-distance fishing vessels. The local fleet is mainly composed of small traditional vessels (less than 5 gross tonnage), comprising, in 2004, 87% of the total fishing fleet and accounting for 8% of the total tonnage. These vessels are usually equipped to use more than one fishing method, such as hooks, gill nets and traps, and constitute the so-called polyvalent segment of the fleet.

Their physical output is low but reasonable levels of income are attained by virtue of the high commercial value of the species they capture: octopus, black scabbardfish, conger, pouting, hake and anglerfish. Purse seine fishing is also part of the local fleet and has, on the mainland, only one target species: the sardine. This fishery represents 37% of total landings. Portugal's Exclusive Economic Zone has 1,727,408 km², being the 3rd largest of the EU and the 20th largest in the world.

The coastal fishing fleet accounted for only 13% of vessels but had the largest GT (93%). These vessels operate in areas farther from the coast, and even outside the Portugal's Exclusive Economic Zone. The coastal fishing fleet comprises polyvalent, purse seine and trawl fishing vessels. The trawlers operate only on the mainland shelf and target demersal species such as horse mackerel, blue whiting, octopus and crustaceans.

The crustacean trawling fishery targets Norway lobster, red shrimp and deepwater rose shrimp. The most important fish species landed in Portugal in 2004 were sardine, mackerel and horse mackerel, representing 37%, 9% and 8% of total landings by weight, and 13%, 1% and 8% of total value, respectively. Molluscs accounted for only 12% of total landings in weight, but 22% of total landings in value. Crustaceans were 0.6% of the total landings by weight and 5% by value. As of 2020, Portugal ranked sixth worldwide in seafood consumption per capita, with each Portuguese, on average, 59.36 kg/person of fish.

Industry

The Portuguese industry had a high development, especially after the Second World War, achieving a peak in 1974, when it represented almost 35% of the GDP of Portugal and achieved a high degree of diversification. As of 2024, industry represented 21.2% of the country's GDP.

Presently, the major industries in Portugal include: machinery, electrical and electronics industries, automotive and shipbuilding industries, injection moulding, plastics and ceramics industries, textile, footwear and leather industries, oil refinery, petrochemistry and cement industries, beverages and food industries and furniture, pulp and paper, wood and cork industries.

Automotive and other mechanical industries such as bicycle industry are primarily located in and around Setúbal, Porto, Lisbon, Aveiro, Braga and Mangualde. Coimbra and Oeiras have growing technological-based industries, including pharmaceuticals and software. Sines has the largest oil refinery in the country and is a major petrochemical centre, as well as the busiest port in Portugal. Maia has one of the largest industrial parks of the country, including noted^{[according to whom?]} wood processing and food industries. Figueira da Foz and Setúbal are major centres of pulp and paper industry. Marinha Grande is the most reputed glass making centre of Portugal. Leiria, Oliveira de Azeméis, Vale de Cambra and Viseu, have important light industries, including injection moulding and plastics. Viana do Castelo and Setúbal are centres of ship building and repair industries.

Modern non-traditional technology-based industries like aerospace, biotechnology and information technology, have been developed in several locations across the country. Alverca, Covilhã, Évora, and Ponte de Sor are the main centres of Portuguese aerospace industry, which is led by the local branch of the Brazilian Embraer and by OGMA. Since after the turn of the 21st century, many major biotechnology and information technology industries have been founded and are concentrated in the metropolitan areas of Lisbon, Porto, Braga, Coimbra and Aveiro.

Energy

Since the late 1990s, when wind power was virtually nonexistent in Portugal, the country has become the 6th producer of this kind of renewable energy. Along with the traditional Hydroelectric energy, the Portuguese companies, including the biggest one in the country – EDP – and with the support of the government have heavily invested in new kinds of renewable energy, from then on. In 2010, 52% of the energy produced in Portugal was renewable.

In 2013, 61.7% of the energy produced was renewable, including 30.4% hydroelectric, 24.1% from wind, 5.2% from biomass, 0.9% solar energy and 1.1% from other renewable energy sources, particularly geothermical energy in the Azores. Thanks to this energetic strategy, during 2013 Portugal had reduced to only 5% the energy that it imports. Fossil fuels are still the source of 38.3% or the energy produced, but the trend is to diminish. In 2013, the increase in the production of clean energy helped to save 806 million Euros in the imports of fossil fuels and CO₂ emission licenses.

In May 2016, Portugal became the second country in the world to be able to have all its energy consumption fully covered by renewable energy alone, for four consecutive days. For the whole year of 2025, 68% of all electricity consumption was produced by renewable energy, reaching a record 37 TWh (Terawatt-hours), mostly supplied by solar energy which had a 25% increase.

In the 1970s, the country abandoned the plan to install nuclear plants and opted not to invest in nuclear power, so there are no such plants in Portugal.

Services

The tertiary sector has grown, producing 74.4% of the GDP and providing jobs for 65.9% of the working population. The most significant growth rates are found in the trade sector, due to the introduction of modern means of distribution, transport and telecommunications. Financial tertiary companies have benefited from privatisation, also gaining in terms of efficiency.

Tourism in Portugal has developed significantly, accounting for 11.8% of GDP by 2025. In 2025, the number of foreign tourists reached nearly 30 million.

Some large Portuguese companies in the services' sector have committed themselves to internationalize their services, like the retailer Jerónimo Martins, which holds the largest supermarket chain in Poland and is also investing in Colombia. Worth to notice is also TAP Portugal, a company often used by transit passengers traveling between Europe, Africa and Latin America (mainly Brazil), which is particularly regarded by its safety record.

Companies

As of 2024, Portugal had 1,593,415 active companies, an increase of 4.4% compared with the previous year. The sector with the highest number of companies registered in Portugal is "Administrative and support service activities" with 259,086 companies, followed by "Wholesale and retail trade; repair of motor vehicles and motorcycles" with 218,811 companies, and "Consulting, scientific, technical and similar activities" with 162,738 companies.

Portugal's competitiveness in the world

The economy of Portugal is ranked 37th in the World Competitiveness Ranking 2025 by Swiss institute IMD. In comparison, this represents a very slight drop from the 36th position where Portugal appeared in 2015.

Competitiveness by city

A study concerning competitiveness, ranking the different municipalities of the country, is published by the More Freedom Institute (Instituto Mais Liberdade). The best-ranked municipalities in the 2025 study were Lisbon, Oeiras and Porto.

Top 20 Ranking:

1. Lisbon: 70,1 points
2. Oeiras: 66,2
3. Porto: 61,6
4. Coimbra: 59,0
5. Aveiro: 53,6
6. Cascais: 52,8
7. Maia: 52,6
8. Alcochete: 52,5
9. Funchal: 51,8
10. São João da Madeira: 51,0
11. Matosinhos: 51,0
12. Braga: 50,7
13. Faro: 49,9
14. Leiria: 49,5
15. Évora: 49,3
16. Ponta Delgada: 48,9
17. Mafra: 48,7
18. Ílhavo: 48,5
19. Vila Franca de Xira: 48,2
20. Palmela: 48,1

Food insecurity

In 2005 and 2006, the National Health Survey gathered information on food security which showed that those making a monthly household income of 251-500 euros made up 37.3% of the food insecure, which was quite contrary to their counterparts. For instance, those making more than a monthly household income of 901 euros made up only 15.9% of the food insecure. After the 2010–2014 Portuguese financial crisis, food insecurity escalated and notably affected those in poorer regions in Portugal—such as Alentejo and Algarve. In the Algarve region, total food insecurity increased from 56.9% to 77.1% from 2011 to 2012, and the severe food insecurity increased from 13.2% to 41.7%. Meanwhile, the national food insecurity only increased by 0.5% (48.6% to 49.1%) and the severe food insecurity of other regions, such as Centro and Norte, started much lower and only increase by approximately 3%. Overall, the general prevalence of food insecurity from 2011 to 2013 in Portugal was practically unchanged; however, the less fortunate and poorer regions were seen to have taken the toll, despite future progress.

The percentage of the Portuguese population suffering from moderate or severe food insecurity between 2022 and 2024 was on average 11.9%, which puts Portugal well above the average of 5.9% recorded in Southern Europe. Portugal was the 3rd country among the 13 in Southern Europe with the highest percentage in this indicator, behind Albania (33.0%) and North Macedonia (15.2%).

Economic emigration

In 2021, the United Nations revised downwards the estimate of how many Portuguese lived outside the country: the organization once pointed to 2.6 million in 2020, but corrected it to 2 million, making Portugal the 20th country in the world with the most emigrants compared to the number of residents. More Portuguese left the country in 2021 than before the COVID-19 pandemic. An increase in emigration to Northern Europe, Belgium and the Netherlands was reported. Portuguese emigrants living in France, Switzerland and the United Kingdom sent the most remittances to Portugal. In 2022, emigrants living in these countries were responsible for more than half of the remittances received by Portuguese families. The data released monthly by the Bank of Portugal on the value of remittances that emigrants send to Portugal shows an increase of 1.8% in 2021 compared to the previous year, surpassing 3 billion euros. Portugal was one of the EU member states with the highest figures for remittances received.