In nominal terms, GDP surged by 6.3%, reaching 284.9 billion euros, significantly outperforming the Eurozone’s average growth rate of 0.8%. While these figures indicate a thriving economy, it is essential to understand the factors that contributed to this growth and how Portugal can maintain this positive trajectory in the coming years.

One of the primary drivers behind Portugal’s economic expansion has been the steady increase in exports, which grew by 3.4% in volume. Portugal’s diversified export market, with strong performances in technology, renewable energy, and specialized manufacturing, has allowed the country to compete globally. While imports also saw a rise of 4.8%, the trade balance remained positive, reinforcing Portugal’s position as a stable economic player. The service sector, particularly tourism and digital services, played a crucial role in this growth, contributing significantly to national revenues.

Foreign direct investment (FDI) has also been a fundamental pillar of Portugal’s economic success. By the end of 2024, FDI in the country reached 200.3 billion euros, reflecting investor confidence in Portugal’s stable business environment, skilled workforce, and innovation-friendly policies. Government incentives, tax benefits for startups, and support for research and development have attracted companies in key sectors such as technology, finance, and green energy.

Additionally, Portugal’s strategic economic policies have played a crucial role in sustaining growth. Investment in infrastructure, digitalization, and energy efficiency has strengthened the country's competitive edge. Fiscal policies promoting business expansion, job creation, and sustainable development have helped maintain a stable economy amid global uncertainties.

Despite these positive trends, challenges remain. The slight decline in export contributions to GDP (down by one percentage point compared to 2023) highlights the need for continuous investment in innovation and new market expansion. Portugal must also focus on diversifying its economic base by fostering industrial modernization and reducing external dependencies.

Looking ahead, Portugal’s economic future depends on sustaining investment in key industries, strengthening international trade relationships, and further enhancing productivity. By leveraging its strategic location, skilled workforce, and commitment to innovation, Portugal can continue its upward economic trajectory and remain a key player in the European economy.

Author

Paulo Lopes is a multi-talent Portuguese citizen who made his Master of Economics in Switzerland and studied law at Lusófona in Lisbon - CEO of Casaiberia in Lisbon and Algarve.

Paulo Lopes