Exports Stood Still in 2025, So Households Carried Portugal's 1.9 Percent Growth and Put 16 Percent More Into Housing

Portugal's economy grew 1.9 percent in real terms in 2025. Growth came from households and investment, while exports subtracted from it. INE, the national statistics institute, published its provisional annual national accounts for 2025 on Wednesday. They show export volumes flat for the year, against growth of 3.4 percent in 2024. Household investment, which INE says is essentially the purchase of housing, rose 16.2 percent.

Nominal GDP reached 308.5 billion euros, up 6.0 percent. The real growth figure is unchanged from INE's earlier estimate. The previous year was revised: growth in 2024 is now 2.7 percent, half a percentage point higher than INE's previous estimate, now that more complete sources have replaced the earlier ones.

Exports stalled

INE says the slowdown in 2025 was due "exclusively" to exports, the only major component that did worse than in 2024. Their net contribution to growth was minus 0.2 percentage points, after plus 1.0 the year before. Goods exports fell 0.3 percent in volume and 1.5 percent in value. Services exports, including tourism, grew only 0.6 percent in volume after 4.7 percent in 2024. Imports of goods, meanwhile, grew 5.4 percent in volume.

The sectors show the same picture. Gross value added fell in only two branches: accommodation and food services, down 2.3 percent, and agriculture, forestry and fishing, down 0.9 percent. Transport and storage grew fastest, at 6.6 percent, followed by construction at 4.3 percent.

Households carried the year

Household consumption was the largest contributor to growth, at 1.2 percentage points, with volumes up 3.7 percent. Investment contributed 0.6 points and grew 6.5 percent in volume. Gross fixed capital formation reached 21.0 percent of GDP, half a point more than in 2024. Of its 8.6 percent nominal rise, 3.2 points came from households.

Household disposable income reached 214.5 billion euros, up 5.7 percent after 10.9 percent in 2024. Wages did most of the work: total compensation rose 7.1 percent. Income taxes rose 8.3 percent and took 0.8 points off the income growth. Consumption rose faster than income, at 6.3 percent, so the household saving rate fell to 12.3 percent from 12.9 percent.

Across the whole economy, employment grew 2.3 percent by headcount and hours worked 1.7 percent, so people worked slightly fewer hours each. Average annual compensation per employee, which includes employers' social contributions, rose 4.8 percent, from 31,077 euros to 32,572 euros.

Saving keeps slipping in 2026

INE's quarterly sector accounts, released alongside, carry the story into this year. In the year to the second quarter of 2026 the household saving rate fell again, to 12.1 percent from 12.4 percent in the first quarter. Consumption rose 1.7 percent on the quarter against 1.4 percent for disposable income. Households' net lending to the rest of the economy slipped to 4.1 percent of GDP. Their investment rate edged up to 6.6 percent of disposable income.

That fits the Bank of Portugal figures we reported on Tuesday: household debt grew 10 percent in the year to July, with mortgages behind most of July's increase. Families are putting more money into homes, and less of each month's income is going into savings.

A revision still to come

These accounts still use the old population and employment figures. INE revised its population estimates for 2021 to 2025 in June. It will fold that revision into the national accounts in March 2027, with the fourth-quarter 2026 figures. It says it cannot yet estimate the effect on the level of GDP. It does not expect relevant changes to growth rates for 2025 and 2026, because the population revision peaked in 2024.

What this means for residents

• Pay outpaced prices. Average compensation rose 4.8 percent in 2025, while the GDP deflator, a broad measure of prices, rose 4.0 percent.
• Tourism is no longer the engine it was. Accommodation and food services shrank in real terms, and services exports barely grew.
• Housing is where household money went. A 16.2 percent rise in household investment sits alongside the price data INE published on Tuesday, with existing homes up 18 percent in a year.