Economy of Portugal

The economy of Portugal is ranked 37th in the World Competitiveness Ranking 2025 by Swiss institute IMD. The great majority of the international trade is done within the European Union (EU), whose countries received 71.4% of the Portuguese exports and were the origin of 74.6% of the Portuguese imports in 2020.

The Portuguese currency is the euro (€) and the country has been a part of the Eurozone since its inception. Portugal's central bank is the Banco de Portugal, which forms part of the European System of Central Banks, and the major stock exchange is the Euronext Lisbon. Among OECD nations, Portugal has a highly efficient and strong social security system; social expenditure stood at roughly 24.6% of GDP.

The Portuguese economy has a GDP growth forecast in 2025 of 2%, according to the IMF World Economic Outlook. The economy's growth has been accompanied by a continuous fall in the unemployment rate (6.3% in the first quarter of 2019, compared with 13.9% registered in the end of 2014). Portugal's unemployment rate stands at 6.4% in January 2025, according to Statistics Portugal. Portugal ranks third country in Europe with the highest GDP growth for Q3 2024 compared to the same period in 2023 since Portugal registered a GDP growth rate of 1.9%, while the average GDP growth rate in the EU and in the Eurozone is 0.9% for Q3 2024, compared to Q3 2023.

Portugal’s budget surplus exceeds 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.

These rates mark an inversion from the negative trends caused by the impact of the 2008 financial crisis in the Portuguese economy that caused it to shrink for three consecutive years (2011, 2012, and 2013), accompanied by a high increase of the unemployment rate (that achieved a record of 17.7% in early 2013). The crisis had caused a wide range of domestic problems due to the levels of public deficit, as well as the excessive debt levels. The problems culminated in the confirmation from Portugal of a €78 billion financial bailout from the EU in April 2011, following similar decisions from Greece and the Republic of Ireland. The government that took office in June 2011 had to face tough choices in regard to its attempts to stimulate the economy while at the same time seeking to maintain its public deficit around the EU average.

Portugal is home to a number of notable leading companies with worldwide reputations, such as The Navigator Company, a major world player in the international paper market; Sonae Indústria, the largest producer of wood-based panels in the world; Corticeira Amorim, the world leader in cork production; Conservas Ramirez, the oldest canned food producer; Cimpor, one of the world's 10th largest producers of cement; EDP Renováveis, the 3rd largest producer of wind energy in the world; Jerónimo Martins, consumer products manufacturer and retail market leader in Portugal, Poland and Colombia; TAP Air Portugal, highly regarded for its safety record, and one of the leading airlines linking Europe with Africa and Latin America (especially Brazil).

Education in Portugal has been in gradual modernization and relative expansion since the 1960s, achieving recognition for its world-standard practices and trends in the 21st century. According to the Programme for International Student Assessment (PISA) 2015, the average Portuguese 15-year-old student, when rated in terms of reading literacy, mathematics and science knowledge, is placed significantly above the OECD's average. Portugal is home to several world class universities and business schools that have been contributing to the creation of a number of highly renowned international managers and are attracting an increasing number of foreign students. Portugal has the highest emigration rate as a proportion of population in the European Union. More than two million Portuguese people (20% of the population) now live outside the country.