Portugal Faces €24B Trade Deficit as Imports Outpace Exports

Portugal’s overseas trade is sending a mixed message. Shipments leaving the country are edging higher, yet the volume of goods arriving remains considerably stronger, widening the commercial gap despite a brisk September performance. The latest release from the National Statistics Institute (INE) puts the situation into stark relief and re-ignites a perennial debate: can the economy grow without an ever-growing dependency on foreign products?

A Snapshot That Matters

Even before diving into the underlying causes, the headline numbers are impossible to ignore. Between January and September Portuguese companies sold goods worth €60.3 B, a modest 1.9 % increase over the same stretch of 2024. Purchases from abroad, however, climbed to €84.3 B, up 6.5 %. September alone looked livelier—export values jumped 14.3 % year-on-year while imports gained 9.4 %—yet the cumulative effect leaves a trade deficit of €24 B, roughly €4 B larger than a year ago. In other words, even a strong single month could not erase months of import-heavy momentum.

Why Are Imports Racing Ahead?

Analysts point first to the energy tab. High international prices for oil and natural gas continue to inflate the cost of fuel and basic chemicals that Portugal does not produce in sufficient quantities. Add to that a still-robust appetite for capital equipment linked to the rollout of the EU-funded Recovery and Resilience Plan, and the result is a steady influx of machinery, electronic components, and construction inputs. Meanwhile, sectors that traditionally bolster exports—agri-food, textiles, and automotive components—have felt the pinch of softer demand in Germany and France, two markets that together absorb more than a third of Portuguese goods.

Three International Variables to Watch

Currency swings, borrowing costs, and geopolitics are quietly shaping the next chapter. A weaker euro against the dollar through much of 2025 has made energy imports pricier, although it has also given marginal relief to exporters billing in dollars. On the financing side, the recent fall in Euribor rates eases credit conditions for households and firms, likely lifting consumption and investment—and by extension imports—in 2026. Geopolitical turbulence, from shipping lanes in the Red Sea to talk of fresh tariffs between Washington and Brussels, sits in the background as a wild card that could quickly tilt costs or demand.

What It Means for the External Balance

The widening merchandise deficit has already fed into Portugal’s broader current-account position, which slipped by about €2 B in the first half of 2025. The Bank of Portugal warns that unless export volumes accelerate, the small external surplus the country enjoyed after the pandemic could vanish. This matters for public-debt dynamics: with growth projected to cool and European fiscal rules returning in 2026, a persistent trade gap would make the Treasury more dependent on external financing just as global rates remain above their pre-COVID norm.

Outlook: Mild Tailwinds, Persistent Headwinds

Most forecasters see imports rising again next year, though at a slower clip—2 % to 4 % depending on the institution—as energy prices stabilize and public-investment projects move from heavy equipment toward local services. Exports should benefit from an expected rebound in Euro-area demand and the scaling-up of green-hydrogen and battery-materials plants along the Portuguese coastline. Yet the question lingers: can a country that buys more than it sells keep narrowing the gap without another bout of currency depreciation or a deliberate industrial policy push? For now, the numbers say Portugal is still buying faster than it is selling.