Portugal's External Surplus Collapses 67% in Two Months — Bank of Portugal Flags Goods, Services and Secondary Income as the Drag

Portugal's external accounts started 2026 on the back foot. According to the balance-of-payments statistical note released by the Bank of Portugal on 17 April, the cumulative surplus on the current and capital account for January-February was just €246 million — a deterioration of €488 million, or roughly two-thirds, compared with the same two months of 2025.

For the euro-area economy that registered a record external surplus of 3.3 per cent of GDP in 2024, this is a sharp reversal. Bank of Portugal analysts trace the decline to three underlying sub-balances: goods, services, and secondary income. The capital account, for once, was the only line helping — it improved in February and partially offset the rest.

The goods balance is doing the damage

The deficit on the goods balance widened by €209 million year-on-year. That opened up because exports fell by €743 million while imports retreated by only €535 million. Portugal imports more than it sells — so when both sides shrink but exports shrink faster, the deficit grows.

The export drop lines up with the weak external demand signals already flagged in the Boletim Económico of March 2026: slowing industrial orders in Germany (Portugal's single largest trading partner), softer auto output at Autoeuropa, and a high-base effect from a very strong first quarter of 2025 in intermediate goods.

Services and secondary income also softer

The services balance — historically the quiet workhorse of Portugal's external position, pulled up by tourism — also contracted. Tourist arrivals remained positive in early 2026 (INE's Easter flash showed foreign drivers more than doubling year-on-year), but services exports include transport, ICT and business services, and those lines moderated.

Secondary income, which captures flows such as remittances and EU transfers unrelated to capital projects, added another small negative contribution. The net effect is that a structural surplus the Banco de Portugal had described for more than two years as "strengthened by the composition effect of services" suddenly looks fragile.

The financial account side

The financial account recorded a positive balance of €78.6 million through February, driven mostly by flows from insurance companies, pension funds, households and other financial institutions — plus, notably, the public administrations. The mirror relationship to the current-plus-capital account means the financial position has adjusted in kind: less outgoing investment as the surplus narrows.

What to watch

Two things. First, whether the export slide is a two-month blip or the start of a pattern. The March figures land in mid-May and will include the front end of the Trump-era tariff adjustment period that has rattled the industrial base of the Iberian peninsula. Second, whether services stay strong through the summer. Portugal's current-account surplus in 2025 was effectively built in June-September; a weaker tourism leg this year would compound the goods deficit and push the external balance towards a full-year deficit for the first time since 2017.

For now, the Bank of Portugal describes the picture as a deterioration, not a rupture. February alone still ran a €134-million surplus — marginally above the €111 million of February 2025. But the momentum carried over from January has shrunk the buffer, and the external sector is no longer cushioning Portugal's growth story the way it did through 2023 and 2024.