Portugal profile

Demography and Health

Portugal displays a mature demographic profile characterized by high life expectancy and low birth rates. The population reached about 10.7 million in 2024, with a birth rate of 8.1 per 1,000 people and a death rate of 11.2 per 1,000, signaling population aging and a natural decrease absent sufficient net in-migration. Life expectancy at birth stands at 82.3 years, placing the country among nations with advanced health outcomes, while under-5 mortality is low at 3.2 per 1,000 live births. The demographic structure implies rising old-age dependency, which can stress public finances unless supported by sustained growth, productivity gains, and immigration. Net migration was positive in 2024 (about 20,648), indicating migration is contributing to labor supply and demographic dynamics rather than population decline alone. In health terms, Portugal benefits from a relatively well-funded system: current health expenditure equals 10% of GDP, and physicians number 5.77 per 1,000 people, suggesting broad access to medical care and a robust health workforce. Domestic general government health expenditure per capita, purchasing power parity terms, was around 2,921 international US$ in 2022, reflecting substantial public investment in health. Social outcomes show poverty at 16.4% of the population in 2021 and undernourishment at 2.5% in 2022, indicating progress but ongoing challenges in ensuring inclusive health and living standards across all regions. Digital connectivity is high, with 85.8% of the population using the Internet in 2023, supporting health information, telemedicine, and broader access to services in a modern health ecosystem.

Economy

Portugal’s economy combines a relatively high standard of living with openness to global markets. GDP per capita is 28,844 current US$ in 2024, while GDP per capita at purchasing power parity is 50,617 international US$, reflecting widespread affordability and a diversified economy. Inflation is contained at 2.42% in 2024, supporting price stability and predictable business planning. The structure shows substantial openness to trade, with exports of goods and services representing 46.5% of GDP in 2024 and imports at 44.7% of GDP, suggesting a balanced trade position within integrated European value chains. High-technology exports amount to about 4.2 billion US$ in 2023, signaling a developing but growing tech-intensive orientation alongside traditional sectors. Research and development intensity stands at 1.7% of GDP in 2022, with 711 resident patent applications in 2021, indicating ongoing investment in knowledge and innovation to drive productivity. Foreign direct investment inflows reach 4.27% of GDP in 2024, underscoring Portugal’s attractiveness for global capital and its potential to fund capacity expansion. The current account balance is positive at roughly 2.2% of GDP in 2024, reflecting a favorable external position and resilience to external shocks. Governance indicators reinforce a supportive environment for growth: Regulatory Quality about 0.76, Rule of Law around 1.07, and Government Effectiveness near 0.99, complemented by a Control of Corruption score of about 0.70. Military expenditure is modest by European standards, at roughly 4.2 billion US$ in 2023, indicating defense needs are balanced with social and economic investments. Overall, Portugal presents a stable platform for investment, with a well-educated workforce, solid governance, and a gradual tilt toward higher value-added activities.

Trade and Investment

Trade and investment are central to Portugal’s development strategy. Exports of goods and services account for about 46.5% of GDP in 2024, while imports account for roughly 44.7%, signaling a high degree of integration with global markets and a strong foreign trade orientation within the European Union. Net foreign direct investment inflows amount to 4.27% of GDP in 2024, reflecting ongoing confidence from foreign capital in Portugal’s growth prospects, regulatory framework, and strategic location in Europe. The current account balance stands at a surplus of around 2.17% of GDP in 2024, reinforcing a positive external balance. The Logistics Performance Index scores 3.6 out of 5 in 2022, placing Portugal among the stronger performers in trade and transport logistics and supporting efficient movement of goods across borders. Internet penetration, at 85.8% in 2023, complements trade by enabling digital trade channels, e-commerce, and remote service delivery. Collectively, these signals point to a business climate with competitive logistics, open markets, and continued potential for upgrading technological value chains and attracting further capital investment.

Governance and Institutions

Portugal demonstrates solid governance and institutional capacity, with credible policy frameworks and relatively effective public administration. Political stability and absence of violence/terrorism score 0.713 in 2023, while Regulatory Quality is 0.755 and the Rule of Law is 1.07, suggesting reliable regulatory conditions and respect for legal frameworks. Government Effectiveness is high at 0.988, indicating capable public services and policy implementation, and Control of Corruption stands at 0.696, reflecting meaningful anti-corruption efforts with room for further improvement. These governance characteristics support a stable macroeconomic environment, predictable regulation, and confidence for households and investors. Public resources allocated to health and social services, alongside an orderly judicial and administrative system, help translate investment into tangible outcomes and support inclusive growth. In a security context, Portugal’s measured military expenditure indicates a balanced prioritization of defense within the broader objective of socio-economic development. Overall, the governance indicators align with a favorable climate for business, innovation, and citizen welfare.

Infrastructure and Technology

Infrastructure and technology in Portugal show a combination of strong logistics capabilities and digital readiness. The Logistics Performance Index of 3.6 (out of 5) in 2022 places Portugal high among peers for the efficiency of its trade and transport-related infrastructure. Internet adoption is advanced, with 85.8% of the population online in 2023, enabling digital services, online government, and e-commerce. The country has a clear path toward sustainable energy, with renewable energy accounting for 32.3% of total final energy consumption in 2021, underscoring progress in decarbonization and energy security. R&D intensity stands at 1.7% of GDP in 2022, supported by 711 resident patent applications in 2021, signaling an emerging innovation culture even as the country seeks to deepen scientific outputs. High-technology exports reached roughly 4.2 billion US$ in 2023, indicating growing specialization in advanced goods and services. The stock of human capital is reinforced by 5.77 physicians per 1,000 people, which supports both health outcomes and productivity. The combination of a strong transport backbone, high digital connectivity, and ongoing innovation investment positions Portugal to upgrade its value chains while attracting high-skilled activity and capital.

Environment and Sustainability

Portugal’s environmental profile reveals both progress and challenges aligned with its climate and energy goals. Per capita greenhouse gas emissions excluding LULUCF are about 5.01 tCO2e, placing Portugal in the moderate range within Europe and signaling the potential for further decarbonization as policy and technology mature. The level of water stress, measured as freshwater withdrawal as a share of available resources, is 12.3% in 2021, indicating manageable but meaningful water resource pressures that could be exacerbated by climate variability. Renewable energy already represents about a third (32.3%) of final energy consumption in 2021, underscoring a strong foundation for decarbonization and energy resilience. The prevalence of undernourishment is low at 2.5% (2022), and life expectancy remains high, reflecting positive social outcomes linked to environmental and health policies. Poverty at national poverty lines stood at 16.4% in 2021, illustrating that inclusive growth remains essential for ensuring environmental gains translate into broad-based improvements. Portugal’s environmental trajectory is well aligned with EU climate and energy objectives and provides a platform for deeper investments in efficiency, electrification, and green innovation to advance sustainability alongside economic dynamism.