Portugal's Trade Gap Widens as Imports Outpace Sluggish Exports

A ripple rather than a wave: that is how the latest trade update can be read. While Portuguese exporters eked out a 0.4% gain between January and August, purchases from abroad advanced six-times faster, underscoring a widening trade gap that has implications for energy bills, factory floors and even the price of a morning galão.

Why the gap matters for Portuguese households

A growing current-account hole is not just an abstract macro concept. Higher import costs—especially for natural gas and refined fuels—tend to filter through to electricity tariffs, transport fares and grocery shelves. Consumers in Porto, Faro or the Azores will eventually feel the squeeze if the imbalance persists. Conversely, stronger exports are usually a buffer, supporting jobs in Aveiro’s ceramics plants, the Alentejo wine trade and the software start-ups along Lisbon’s waterfront.

Reading the fresh numbers

Flash data published by the Instituto Nacional de Estatística reveals that goods shipped abroad totalled roughly €51.2 B through August, barely above the level registered in the same eight-month period of 2024. Imports, however, climbed to a little over €65 B, an annual increase of about 6%. That leaves the merchandise trade deficit hovering near €14 B, marginally wider than a year ago. Services—tourism chief among them—continue to offset part of the shortfall, yet the merchandise picture remains stubbornly red.

Energy, machinery and the usual suspects

Two forces explain most of the divergence. First, the rebound in international energy quotations after last spring’s lull pushed up the invoice for LNG cargoes off Sines and crude oil refined in Matosinhos. Second, Portuguese manufacturers have imported more industrial machinery and electronic components, betting on factory upgrades ahead of EU-funded digital and green-transition deadlines. Together these two categories account for almost half of the extra €3.6 B in import spending recorded so far this year.

The export engines still humming

Not everything is flat. Automotive parts assembled in Palmela and Mangualde are selling briskly again, thanks to the European car market’s slow recovery. Footwear shipments to the United States and Canada are also posting double-digit growth, helped by a strong dollar. Even the embattled textile sector found breathing room in niche, higher-margin segments—casa portuguesa bed linen and technical fabrics for sportswear. But these bright spots have merely offset declines in pulp, paper and some agri-food lines hurt by drought-related output cuts.

What economists expect from here

Analysts at Banco de Portugal told reporters last week they foresee export momentum picking up to around 2% for the full year, while import growth is likely to cool to 4% as energy prices stabilise. That projection, if confirmed, would still leave Portugal with its largest goods deficit since 2018, but the central bank argues the gap is sustainable so long as services revenue—tourism, IT consulting and the budding audiovisual industry—continues to surge.

European tailwinds and new trade pacts

One factor that could tilt the scales is Brussels’ recent push to finalise trade agreements with Mercosur and, separately, with India. Portuguese wine makers, cork producers and renewable-energy exporters are lobbying hard to ensure tariff concessions translate into concrete orders. On the industrial side, the restart of Volkswagen’s production lines in northern Germany is already lifting demand for made-in-Portugal gearboxes and wiring harnesses.

What it means on the ground

For residents, the short-term takeaway is straightforward. Energy bills are likely to remain elevated through winter, given the heavier import bill for gas and oil. At the same time, a more competitive euro combined with gradual export recovery could help safeguard jobs in manufacturing hubs from Braga to Setúbal. Policymakers will be watching December’s figures closely. So will families comparing supermarket receipts and small companies deciding whether to invest or sit tight.