Portugal’s Post-Covid Boom Leaves Two Million in Poverty

Portugal’s celebrated rebound from the pandemic has not yet reached everyone. Behind the glowing export figures and record tourist numbers, 2.1 million residents still live on incomes below the poverty line, according to fresh data released this week. The headline rate—19.7% of the population at risk of poverty or social exclusion—is the lowest in a decade, yet the sheer count of people affected has barely budged. Advocates warn that unless policymakers move beyond short-term relief, poverty will remain a structural challenge baked into the economy.

Poverty snapshot: numbers that refuse to fall

Newest estimates from the European Anti-Poverty Network (EAPN), cross-checked with the latest INE survey, place the poverty threshold at €632 a month for a single adult. Anyone earning less than that—roughly €7,588 a year—is officially poor. On that basis, the country still shelters more than two million people in hardship, despite a small reduction recorded by statisticians last year. Economists note a decade-long trend: percentage rates oscillate, but absolute numbers cling stubbornly to the same plateau.

Why the economic recovery barely moves the dial

Portugal’s GDP has expanded on the back of record tourism receipts and an export boom in tech services and green energy components. Yet the median wage after tax stands near €1,100, meaning half of workers earn less. Persistent inflation and surging housing costs swallow much of that pay packet, leaving many in so-called in-work poverty. Social spending helps, but the impact of social transfers on poverty reduction remains the third weakest in the EU, well below the EU average.

Who feels the pinch: children, women and the ageing poor

Women represent 56% of all adults in poverty, reflecting lower wages and interrupted career paths. Child poverty, measured at 40% of children in households surviving on €422 or less per month, alarms educators who fear lifelong scarring. At the other end of the scale, 21.1% of seniors now live in poverty, signalling that pension adequacy has eroded in real terms. The figures confirm what aid agencies see daily: hardship is increasingly severe deprivation, not just a temporary squeeze.

Geography of hardship: islands and interior lag behind

The map of deprivation shows clear fault lines. The Azores and Madeira top the ranking with poverty rates of 24.2% and 19.1%, respectively. Parts of the Alentejo interior and the Setúbal peninsula follow close behind, while the Lisbon metropolitan area posts the lowest rate at 12.9%. Analysts link the gaps to weak transport links, lack of diversified industry and limited access to higher education. EU-financed regional development funds have begun to flow, but NGOs argue they must also tackle transport isolation and digital access.

Policy promises and reality check

The government’s National Strategy to Combat Poverty 2021-2030 packages 270 measures under six pillars. Flagship ideas include neighbourhood case managers to simplify welfare applications, real-time municipal dashboards to track disadvantage and a new research agenda with universities. Yet the latest progress report shows uneven budget execution and delays in upgrading the social income supplement or rolling out the EU-funded child guarantee. Officials admit that inflation consumed funds earmarked for new programmes.

Expert voices: what needs to change

EAPN’s Sandra Araújo calls for a rights-based approach that treats adequate income as a civic guarantee. Economist Francisco Louçã warns that stubborn income inequality undermines growth itself, while Cáritas director Ana Simões stresses the need to address multidimensional poverty covering food security, adequate housing and community health. All three converge on one point: without a living wage that tracks productivity, welfare alone will never close the gap.

Looking ahead: fault lines to watch in 2026

Attention now shifts to the 2026 State Budget, where lawmakers must decide whether to raise the minimum income and expand rent relief. Parallel talks in Brussels over the next tranche of EU cohesion funds could bankroll regional projects if Lisbon produces credible anti-poverty targets. Reforms to the minimum income scheme and upgraded digital welfare systems are also on the table, alongside initiatives to link the green transition jobs pipeline to unemployed workers. With demographic ageing accelerating, analysts say political consensus will be vital. Citizens, meanwhile, are demanding not just promises but monitoring data that prove policies are finally bending the curve.