Insights on Income and Expenditure in Portugal

The improvement of Portugal’s economic performance over 2015-2016 supported a pick-up in growth of the country’s per capita disposable income and spending over this period. Nevertheless, Portuguese households remain cautious towards consumption, while increasing inequality continues to fuel the expansion of low-income classes. Portugal’s economic performance, a declining and ageing population, and lifestyle changes will impact trends in income and spending in the country in the long run.

Social Class Composition

Social class D (the second lowest-income class) is prevalent in Portugal. Over 2011-2016, all of the country’s social classes registered a decline in their numbers, although social classes A and E (the top and bottom income classes, respectively) displayed a slower rate of contraction than the rest of social classes, due to an increase in the country’s income gap over that period. This trend is expected to continue through to 2030, favouring companies targeting consumers at both ends of the income distribution.

Social Classes in Portugal

social class distribution in Portugal

Source: Euromonitor International

Consumer Expenditure by Region

The Lisboa region (which includes the country’s capital city, Lisbon) represents the largest share of total consumer expenditure. The size of the Lisboa consumer market is the result of both its large population and its high levels of average per household spending.

During 2017-2030, the Lisboa region is also forecast to be amongst Portugal’s fastest-growing markets (as it will continue to benefit from a large share of total investment into the country), together with Algarve (backed by its important tourism sector) and Madeira (due to economic activity generated by its free trade zone).

Portugal’s Consumer Market by Region

consumer market in portugal by region

Source: Euromonitor International

Future Opportunities

Looking forward, single-person households are set to be the most dynamic consumer market across household types through to 2030. A category to pay attention to is miscellaneous goods and services. Mainly personal care products and insurance and financial services are expected to be the fastest-growing category in 2017-2030.