Economy Minister Pledges to Lift Portuguese Living Standards to the EU Average Within 20 Years

Portugal's Minister of Economy and Territorial Cohesion, Castro Almeida, has set out an unusually long-horizon ambition: to bring Portuguese living standards up to the European Union average within two decades. Speaking on 29 June at the closing session of a conference organised by the ANMP (Associação Nacional de Municípios Portugueses, the National Association of Portuguese Municipalities) in Coimbra, he said there was "no reason" for Portuguese citizens to keep living below the European average and that the government "has a plan in mind" to close the gap by the mid-2040s.

"We cannot be satisfied with this stagnation that the country has been in for many years," the minister told the audience, whose conference theme — "a State that simplifies, a State that holds accountable" — doubled as a summary of the government's pitch. The route to convergence, he argued, runs through faster growth, a more competitive economy, and more productive companies and workers.

The convergence gap

The aspiration collides with a stubborn reality. By most measures Portugal sits near the bottom of the EU's prosperity table; some analyses place it as the bloc's sixth-poorest member when measured by purchasing power. The Banco de Portugal (Bank of Portugal) expects the economy to grow around 1.8% in 2026 — respectable, and above the euro-area average, but nowhere near the pace needed to vault the country to the EU mean in 20 years.

Castro Almeida's emphasis on "valuing work" points to the heart of the problem: Portuguese wages remain among the lowest in Western Europe, a structural weakness that feeds emigration of skilled young people and a long-run demographic squeeze. Lifting incomes, he suggested, depends on raising productivity rather than simply legislating higher pay.

A familiar refrain, a longer clock

The plan, as described, leans on themes the government has been pressing for months: cutting red tape, attracting investment — including its bet on below-EU electricity prices to lure green industry — and squeezing more value out of the European funds flowing through the €22 billion Recovery and Resilience Plan (PRR). What is new is the explicit 20-year framing, an attempt to anchor short-term reforms to a measurable destination. Business sentiment, at least, has been cooperating: confidence has brightened for three straight months, even as households stay cautious.

What This Means for Expats

• Wages should be the metric to watch. If "valuing work" translates into real measures, the slow climb in Portuguese salaries matters for anyone employed locally or running a business that hires here.
• Reforms aimed at competitiveness can cut both ways. Simpler licensing and lower business friction help founders and the self-employed; they may also come with changes to tax and labour rules worth tracking.
• Immigration is part of the growth maths. A shrinking, ageing workforce means the economy increasingly leans on foreign labour — immigrants already make up nearly one in five Social Security contributors.
• Convergence is a 20-year bet, not a budget line. Treat the headline as direction of travel, not a promise. The cost of living and wage gaps that drew (or deterred) you will shift only gradually.

For now the plan is a statement of intent rather than a published strategy with numbers attached. The test will be whether the government can convert the rhetoric of competitiveness into measures that move the productivity needle — the one lever that, over two decades, actually decides whether Portugal catches up.