If you ask a Portuguese how is it, The most enthusiastic answer you can expect is Mais Ou Menos (more or less). Being melancholy (and trying in this condition a certain pleasure …) it seems a characteristic trait in the country more to the West in Europe. It is true that the latest report on happiness promoted by the EU, the World Happiness Report, places Portugal in 93rd place in the ranking of personal satisfaction between 157 nations. To weigh on this state of mind is the traditional Saudade, that mixture of nostalgia and regret that accompanies the Portuguese from birth, but there are also great contradictions in a country that, according to the latest Eurostat data, marks growth rates at Chinese pace.
Its gross domestic product has in fact recorded, At European level, in the fourth quarter of 2024, the third highest growth (2.7 percent, on an annual basis +1.9), after Lithuania (3.6) and Spain (3.5) and the highest quarterly variation (1.5), with Spain in third place (0.8). Anchor: unemployment is currently 6.4 per cent, falling compared to 6.7 of 2023 (in 2014 it was in 2014 (2014 at 13.9 percent). Results, in just two decades, which brought the American Nobel Prize Paul Krugman to define the Portuguese one “an economic miracle”. Yet all this clashes, as the weekly Visao writes, with rates of social inequality among the highest of the older continent: fourth behind Bulgaria, Lithuania and Latvia, with about 2.1 million people (a fifth of the population) who live in conditions of poverty or social exclusion, citizens who cannot enjoy the same benefits and opportunities of all the others. In 2023, 24 percent of the Portuguese lived with less than 738 euros per month. Of these, 1.7 million (16.6 percent) earned less than 632 euros per month, the country’s relative poverty threshold. Many are workers who receive the minimum salary of 820 euros gross (730 euros per month net of social contributions). It is no coincidence, then, if in the last elections of March 2024, the party of the Ultradestra Chega (“Basta”) by the strong social claims, led by the former journalist, populist and sovereignist André Ventura, has obtained a historical record of votes with more than 18 percent of the consents.
And this, in a nation that lived the longest period of fascist regime in Europe (41 years), It speaks volumes about what the feeling of the Portuguese is towards politics. On the striking result of the party, the scandals related to the exploitation of concessions for lithium, broke out in 2023 and which involved some ministers of the socialist government of António Costa. The current president of the European Council, then touched by the investigations (the investigators found almost 76 thousand euros hidden in the office of his head of Cabinet of Vitor Escaria) was forced to resign and the executive crisis.
The positive numbers of the most recent period, In any case, they are partly the result of an almost natural rebound, as the economist Luís Cabral, academic director of the Nova Sbe Public Polics Institute of Carcavelos explains to Panorama. «The right question is not why the Portuguese economy has now developed so much, rather because it has not done it faster in recent decades. In fact, from about fifteen years, the per capita GDP, correct for inflation, has increased less by 1 percent a year. For a country that has benefited from a huge positive shock of human capital (the number of Portuguese with university education has quadrupled in a generation, editor’s note), is a rather modest rate ». It is therefore an economic progress that brings distortions with it. Just think of the effects of the tourist boom, one of the growth engines (in 2024 there were 31.6 million visitors and 80.3 million overnight stays, equal to +5.2 percent and +4 respectively compared to 2023): the costs of the houses had very rapid increases, with the “gentrification” of the historic centers and the expulsion of traditional inhabitants. Here, whole ways have been transformed – as happens in Italy – in a succession of B&B. “A lot has changed: in the heart of the cities we have lost many people with the uncontrollable spiral of rents” underlines Irma Sousa, social worker of the Municipality of Porto, one of the favorite destinations by today’s tourism. «The income, especially of the elderly, cannot support the prices that are applied, adds Sousa. «We are talking about people who receive a pension of 250-280 euros per month. With such figures, today in the center you cannot even afford a room ». In the end of last September thousands of people showed in Lisbon for the right to the house. In the capital and in locations such as Cascais and Amadora, which form the metropolitan area called Grande Lisboa, accommodation with a bedroom absorbs half of the salary of a worker on average. In the second quarter of 2024 the average price per square meter reached 1,644 euros, with an increase of 54 percent compared to the same period of 2019 (in the face of a per capita GDP which is still low, compared to other European states, and equal to 22,600 euros, the Italian one is 32,350).
The social and economic relapses are heavy, In a country that resumed with great sacrifices from the financial collapse of 2011 and, at the same time, it is difficult to retain many young people, especially the most educated ones (between 2008 and 2023 about 361 thousand Portuguese up to 35 years have emigrated abroad in search of better paid jobs). «It is important to underline how the economy is growing mainly in low innovation sectors such as tourism, agriculture and various services, with labor productivity levels and relatively low wages. This means that, for a young man with a high level of education, career and earning perspectives are not very attractive, “says Cabral. A comparative analysis of the OECD indicates that the Portuguese average class has a lower purchasing power than others in the European Union. An annual income of 15,500 euros places a person in the medium-high class, while in Spain or Italy it corresponds to the medium-low class. And Portugal stands out for a relatively reduced percentage of families who identify themselves in the middle class: only 32 percent say they are part of it. In the Netherlands, on the contrary, 82 percent of the population consider themselves in the middle of the social scale. To try to put a brake on the diaspora of young people, the new conservative government led by Luís Montenegro, leader of the Social Democrático Partido (PSD), has included in the financial law for 2025 a measure that provides for a ten -year facilitated tax regime. In particular, those who are less than 35 years old and earn up to 28 thousand euros will not pay taxes the first year and receive an exemption of 75 percent up to the fourth, one of 50 percent up to the seventh and then 25 percent up to the tenth. But as the International Monetary Fund also claims, there is no evidence that such an expensive measure, currently estimated at 525 million euros, may be successful. Jean-François Dauphin, head of the Mission of the IMF for Portugal, invited the government to think twice, because “the way to deal with the problem must be more complete, and consists in bringing the living standards to the average of the euro area”. In other words, structural interventions. The great unknown is also linked to the fact that this law may have the same fate as that approved by the socialists in 2009, and that it went in the opposite direction, existening from the payment of taxes the pensioners arriving from abroad. In 2024 the legislation was repealed, precisely because the costs and consequences – such as the prices of the stars’ houses – exceeded the benefits. Now, from “Eldorado of retirees”, Portugal aspires to become a tax paradise for young people. Who knows if he can succeed.
