Cost of living news in Portugal

Household electricity prices in Portugal remained below the European Union and eurozone averages during the first half of 2026, according to the energy regulator Entidade Reguladora dos Serviços Energéticos (ERSE). However, domestic natural gas prices ranked as the third highest in the bloc at 0.13 euros per kilowatt-hour, tied with France. Despite the high ranking, household gas costs fell 10 percent year-on-year, mirroring price drops recorded across several European nations.

Average electricity prices paid by households in Portugal's liberalised energy market have stayed above regulated tariffs since mid-2023, according to the Energy Services Regulatory Authority (Entidade Reguladora dos Serviços Energéticos or ERSE). The price gap between the two markets widened to its highest point in the third quarter of 2024 before narrowing throughout 2025. ERSE monitors consumer tariffs across both systems as households retain the legal right to switch back to regulated supply contracts.

House prices in Portugal climbed 41.5 percent over five years, marking the largest increase in the European Union since 2020. Data compiled by statistical database Pordata and the Francisco Manuel dos Santos Foundation (Fundação Francisco Manuel dos Santos) shows that home construction remains far below levels recorded at the beginning of the century. The steady rise in costs has intensified affordability pressures for households across the country.

Galp reported a 68 percent increase in third-quarter net profit to 682 million euros, boosted by elevated crude oil prices and refining margins. The earnings announcement, filed with the Securities Market Commission (Comissão do Mercado de Valores Mobiliários or CMVM), comes as Eurostat figures show transport fuel prices in Portugal rose 30.3 percent year-on-year in September. Across the European Union, fuel prices increased by an average of 31.4 percent over the same period.

Socialist Party (Partido Socialista or PS) secretary-general José Luís Carneiro called on the government to halt its planned revision of rental legislation, arguing the reform will spur evictions and harm vulnerable tenants. Portuguese Communist Party (Partido Comunista Português or PCP) secretary-general Paulo Raimundo joined the criticism in Porto, accusing the governing coalition and right-wing parties of acting on behalf of property speculators. Former minister Assunção Cristas defended her 2012 tenancy overhaul, while Carneiro demanded explanations from Prime Minister Luís Montenegro over broader living costs and urged the state to guarantee rental payments instead.

Housing prices in Portugal rose 41.5% between 2020 and 2025, marking the highest increase among the 18 European Union countries that saw gains, according to database Pordata. National Statistics Institute (Instituto Nacional de Estatística or INE) figures show median property values in Lisbon and Cascais have climbed past 5,000 euros per square meter, with some Lisbon civil parishes exceeding 7,000 euros. Recent polling by the Francisco Manuel dos Santos Foundation (Fundação Francisco Manuel dos Santos) found that 66% of Portuguese citizens now view housing as the state's main policy priority.

Socialist Party (Partido Socialista or PS) leader José Luís Carneiro defended his decision to allow the passage of the 2027 State Budget (Orçamento do Estado), warning that triggering a domestic political crisis would worsen conditions for families facing high living costs. Speaking in Valongo, Carneiro cited widespread inflation in food, energy, and housing, alongside political and economic turbulence in major partner countries including Spain, France, and Germany. He said the PS will instead focus on introducing targeted budget amendments during committee debates.

Consumer protection organization Deco Proteste warned that the price of a standard 13-kilogram butane gas cylinder could hit 40 euros before the end of the year due to rising energy costs. The average price exceeded 37.50 euros in October, up from 34.11 euros at the start of the year. The group urged the government to reduce the value-added tax (Imposto sobre o Valor Acrescentado or IVA) on bottled gas from 23% to the reduced 6% rate to alleviate pressure on household budgets.

Over half of Portuguese residents, or 53%, relied on borrowed money or credit cards to pay regular household bills over the past six months, according to the European Consumer Payment Report 2025 by Intrum. That proportion rises to 79% among households with below-average incomes. The findings indicate widespread household financial strain driven by persistent living expenses across Portugal.

Tents spring up in Lisbon as Portugal housing protests spread

Tens of thousands of demonstrators marched through Lisbon, Porto, and Coimbra to protest soaring living costs and escalating housing prices. Organised by the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP), the protests called for higher wages to counter steep inflation and rents. In Lisbon, housing activists gathered at Rossio Square to establish an encampment, drawing attention to government policies and the country's housing shortage.

Update: Housing Activists Camp Overnight in Lisbon and Porto Squares

Protesters maintained overnight tent encampments in Lisbon's Rossio and Porto's Praça D. João I after demonstration permits expired at midnight, with police opting not to intervene. In Porto, demonstrators voted during an assembly to continue occupying the square, while emergency services extinguished a rubbish container that had been set on fire nearby.

Protests against rising living costs and housing expenses are scheduled across Lisbon, Porto, Coimbra, and Faro this weekend. Demonstrators in Porto launched a vigil in Praça D. João I following a week of encampments and clashes over affordable accommodation. Trade union confederation General Confederation of the Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) also scheduled street demonstrations to press for higher wages and price controls.

Update: Porto Protesters Pause Overnight Camps Ahead of Saturday Demonstrations

Spokesperson João Silveira announced that demonstrators in Porto would not camp overnight in Praça D. João I on Friday due to a lack of resources, but confirmed the encampment would resume Saturday alongside planned trade union marches. Meanwhile, government officials and Lisbon Mayor Carlos Moedas addressed the ongoing unrest, with ministers insisting that street protests will not dictate housing policy.

The Energy Services Regulatory Authority (Entidade Reguladora dos Serviços Energéticos or ERSE) proposed a 1.5% average rate increase for normal low-voltage electricity customers in mainland Portugal's regulated market. The adjustment takes effect in January 2027 and follows an earlier 2.7% rate hike introduced in October. Higher wholesale power prices driven by natural gas costs contributed to the increase, though savings from renewable energy contracts prevented steeper price jumps.

Porto Mayor Pedro Duarte pledged that the city council (Câmara Municipal do Porto) will be relentless against any attempts to pitch tents in Praça D. João I, where activists established an encampment to protest housing unaffordability. Duarte asserted that the central square is not a campsite and warned that public demonstration rights cannot infringe upon broader civic freedom. He also criticized organizers, arguing that parts of the protest have goals unrelated to housing and seek to provoke disruption.

Update: Protesters Pitch Dozens of Tents Defying Porto Mayor

Protesters defied the mayor on Wednesday night, pitching more than 40 tents in Praça D. João I under the observation of the Public Security Police (Polícia de Segurança Pública or PSP). Demonstrators characterized the renewed camp as an act of political despair rather than leisure, maintaining that protests must disrupt civic leaders to highlight the housing crisis.

The cost of an essential food basket monitored weekly by consumer protection association Deco Proteste rose by 70 cents to €256.26. The increase follows a previous week climb of €1.34, continuing an upward trend across a basket containing 63 essential goods including meat, dairy, produce, and pantry staples.

The Public Security Police (Polícia de Segurança Pública or PSP) and the Porto Municipal Police (Polícia Municipal) cleared an encampment of approximately 50 tents in Praça Dom João I on Monday morning. Activists had occupied the square following a weekend demonstration protesting escalating housing costs and the rising cost of living. The Left Bloc (Bloco de Esquerda) demanded explanations from the Ministry of Internal Administration regarding the legal basis for dismantling the camp.

Update: Housing Activists Sleep Outdoors After Tents Dismantled

Roughly 200 housing activists spent Monday night sleeping in Praça Dom João I despite police removing their tents earlier in the day. The demonstrators vowed to maintain their presence in central Porto until local and national authorities address rising rents and housing scarcity.

The Police Professionals' Trade Union Association (Associação Sindical dos Profissionais da Polícia or ASPP/PSP) warned that the salary adjustments in the 2027 State Budget (Orçamento do Estado) fail to compensate for recent inflation. The union argued that the proposed 2.3% adjustment only matches projected inflation rates without restoring lost purchasing power for members of the Public Security Police (Polícia de Segurança Pública or PSP). ASPP/PSP is calling on lawmakers to introduce a formal safeguard clause during parliamentary budget debates.

Thousands of demonstrators took to the streets in Lisbon, Porto, and other cities on Saturday to protest rising living costs and the lack of affordable housing. Organised under the banner “You can't live like this anymore” (Não Dá Mais Para Viver Assim), participants marched for higher wages and cheaper rents, with some setting up an encampment at Praça D. João I in Porto to prolong the demonstration.

Thousands of people demonstrated in Lisbon, Porto, Braga, and Aveiro to protest rising living expenses and unaffordable housing. Organized by the civic platform “Não dá mais para viver assim” (We can no longer live like this), demonstrators marched through central avenues demanding rent caps, price controls, and an expansion of public housing. The demonstrations coincided with data from the National Statistics Institute (Instituto Nacional de Estatística or INE) showing residential construction costs rose 7.5% year-on-year in August.

Parliament voted unanimously to extend the discount on the tax on petroleum and energy products (Imposto sobre Produtos Petrolíferos or ISP) through December 31. The temporary relief mechanism offsets value-added tax revenues when retail fuel prices rise more than ten cents above the March 2022 baseline. The measure applies retroactively from June 30 after lawmakers rejected wider tax-cut proposals from opposition parties.

Prime Minister Luís Montenegro faced questions in parliament during a fortnightly debate (debate quinzenal) following the presentation of the 2027 State Budget (Orçamento do Estado). The Socialist Party (Partido Socialista or PS) signaled it will abstain during the vote, which should secure the proposal's approval. Opposition parties, led by Communist Party (Partido Comunista Português or PCP) leader Paulo Raimundo, criticized the spending plan over public sector wages and social investment.

Update: Unions and Employers Push Back on 2027 Budget

Trade unions and business associations criticized the government's proposal, with employer groups citing insufficient investment and the General Confederation of the Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) arguing the measures deepen inequality. The Judicial Staff Union (Sindicato dos Funcionários Judiciais) threatened strike action after warning that planned career upgrades were omitted from the budget.

The Automobile Association of Portugal (Associação Automóvel de Portugal or ACAP) presented a proposal to phase out the vehicle tax (Imposto Sobre Veículos or ISV) over ten years until its complete elimination in 2036. Prepared in a study by EY, the plan suggests reducing the purchase levy by 10% annually while offsetting lost revenue through increases in the annual single circulation tax (Imposto Único de Circulação or IUC). The proposal seeks to modernize automobile taxation and reduce upfront costs for car buyers.

Social institutions including the Comunidade Vida e Paz and Refood warn that surging fuel prices are forcing them to consider cutting staff and services. Both organizations report that current government support is insufficient to cover the increased operational costs of their logistics and vehicle fleets, potentially compromising food distribution to vulnerable families.

Portugal recorded the highest annual increase in house prices within the European Union during the second quarter of 2026, with a 16.5% rise. According to Eurostat figures, this growth significantly outpaced the 3.2% inflation rate, with Portugal, Bulgaria, and Spain leading the upward trend while other nations like France and Finland saw declines.

The G7 nations have agreed to a coordinated release of 100 million barrels of diesel and crude oil from emergency reserves over the next four months to stabilize energy markets. The decision follows pressure from the United States and concerns over potential export restrictions, with European leaders and the European Commission emphasizing the need for global cooperation. Former Portuguese Prime Minister António Costa, now leading the European Commission, welcomed the move as a necessary step to address market volatility.

The Portuguese Communist Party (Partido Comunista Português or PCP) has announced it will vote against the 2027 State Budget. Secretary-General Paulo Raimundo stated that the party does not need to review the document to reach this decision, as it fundamentally opposes the current government's policy direction. The PCP also criticized the Socialist Party (Partido Socialista or PS) for its likely abstention, arguing that this position enables the government's agenda.

Natural gas prices in the regulated market increased by an average of 6.4% starting today, according to the Energy Services Regulatory Authority (Entidade Reguladora dos Serviços Energéticos or ERSE). The adjustment affects approximately 431,000 customers who remain on regulated tariffs. For a typical household, this change represents a monthly bill increase of between 0.91 and 1.62 euros depending on consumption levels.

Median rent prices for new contracts have reached record levels, exceeding ten euros per square meter nationally in the second quarter. This represents a 10.2% increase compared to the same period last year, with the highest costs recorded in Lisbon, Madeira, and the Setúbal Peninsula.

The municipality of Barcelos has approved a new tourist tax of two euros per night for overnight stays in local accommodation. The fee applies year-round and is capped at a maximum of seven consecutive nights per person.

The Portuguese Communist Party (Partido Comunista Português or PCP) has proposed fixing the price of intermodal transport passes at 20 euros for the Lisbon and Porto metropolitan areas, as well as other intermunicipal communities. The party argues that the state must provide the necessary funding to ensure this price point, particularly as the government introduces new rail-only passes.

The Portuguese Communist Party (Partido Comunista Português or PCP) has expressed zero expectations for the government's 2027 State Budget proposal. Secretary-General Paulo Raimundo called for a 'fire and brimstone' policy to combat the rising cost of living, warning that the party will not support the budget if it continues the government's current economic path.

Starting Sunday, the Green Rail Pass (Passe Ferroviário Verde or PFV) is valid on CP – Comboios de Portugal suburban lines in Lisbon and Porto. The Ministry of Infrastructure and Housing stated the measure aims to simplify travel and reduce costs for commuters. While the pass covers most CP lines nationwide for 20 euros monthly, it excludes Alfa Pendular and Intercidades services.

The government is reducing the discount on the Tax on Petroleum and Energy Products (Imposto sobre os Produtos Petrolíferos or ISP) as fuel prices are expected to drop next week. The support for diesel will decrease to 0.85 cents and for petrol to 0.07 cents, a move that has drawn criticism from transport sector representatives.

President of the Republic António José Seguro expressed deep concern regarding the rising cost of living and fuel prices in Portugal. He suggested that the issue extends beyond national borders and urged the European Union to take action to protect the most vulnerable. Regarding the ongoing investigation into the PJ, the President reaffirmed his confidence in the institution.

Parliament has rejected 14 legislative initiatives aimed at mitigating the rising cost of living, including proposals from the Chega party to reduce VAT on fuel and food. The debate, which took place without government presence, saw cross-party disagreements that prevented any of the measures from passing.

André Ventura, president of the Chega party, has accused the Socialist Party and the Social Democratic Party of maintaining a non-aggression pact to block his proposal for a VAT reduction on fuel. Ventura argued that the measure is fiscally sustainable and necessary to combat the rising cost of living, while critics have questioned the proposal's broad impact.

Diesel prices have reached a record average of 2.267 euros per litre, prompting the Minister of Environment and Energy, Maria da Graça Carvalho, to urge citizens to reduce energy consumption. Despite these historic costs, national fuel usage has continued to rise. The political opposition, including the Liberal Initiative (Iniciativa Liberal or IL), is now pressuring the government to fulfill a parliamentary recommendation to lower the tax on petroleum products (Imposto sobre os Produtos Petrolíferos or ISP).

Fuel prices in Portugal have reached record highs, with diesel and gasoline costs rising significantly since the escalation of conflict in the Middle East. Analysts warn that the situation is straining household budgets, while the Communist Party (Partido Comunista Português or PCP) continues to call for price caps and taxes on large corporate profits.

Finance Minister Joaquim Miranda Sarmento warned that reducing VAT on fuel and essential food items would cost two billion euros and push public accounts into a deficit. The PS and the Communist Party (Partido Comunista Português or PCP) continue to advocate for these measures to mitigate the rising cost of living.

Prime Minister Luís Montenegro stated this Saturday that he will not be the 'father of austerity', rejecting calls for impulsive spending measures that could increase national debt interest rates. While facing criticism from former Prime Minister Pedro Passos Coelho, who urged more boldness in reforms, Montenegro defended his government's focus on macroeconomic stability and prioritizing cohesion and agricultural policy in the next European Union budget.

Update: Government announces new cost-of-living relief measures

The government has approved a package of measures to ease household financial pressure, including income tax cuts across the first six brackets and an extraordinary pension payment. These tax reductions, which aim to provide relief starting in November, are expected to cost the state approximately €400 million.

Mariana Leitão, leader of the Liberal Initiative (Iniciativa Liberal or IL), has demanded that the government implement a 30-cent per litre reduction in fuel prices. Leitão criticized the state for failing to reduce its own spending while continuing to tax citizens, arguing that the government is ignoring a proposal already approved by parliament.

A new study from the Friedrich Ebert Stiftung (Fundação Friedrich Ebert Stiftung or FES Portugal) reveals that 19% of people in Portugal struggle to pay for essential household energy. The report, which compares Portugal to five other European nations, identifies higher vulnerability among women, those with mental health challenges, and residents living outside major urban centers.

Chega has two bills in Parliament to lower fuel VAT to 13% and apply zero VAT to a basket of essential food items. The PS advocates for the same goals but through recommendations to the Government, while the IL has already managed to pass a resolution to reduce the ISP. Meanwhile, the Government is focusing on relief...

The General Union of Workers (União Geral de Trabalhadores or UGT) is calling for a minimum wage of 1,000 euros by 2027, while the General Confederation of Portuguese Workers (Confederação Geral dos Trabalhadores Portugueses or CGTP) demands a significant 'wage shock'. Employers remain opposed to reopening the existing tripartite agreement, which currently sets the 2027 target at 970 euros. The Minister of Labour stated that while the government is open to dialogue, no immediate changes to the agreement are planned.

Minister of Economy Manuel Castro Almeida has acknowledged that inflation is rising rather than falling, causing significant difficulties for Portuguese households. The government plans to implement targeted support measures for specific sectors, such as professional transporters and agriculture, rather than providing generalized relief. These measures aim to address the impact of increasing fuel prices on the national economy.

Domestic customers in the regulated electricity market will face an average price increase of 2.7% starting October 1st. The Energy Services Regulatory Authority (Entidade Reguladora dos Serviços Energéticos or ERSE) attributed the tariff hike to rising energy costs, which have been exacerbated by international geopolitical tensions.

The Federation of Public Administration and Public Purpose Entities Trade Unions (Fesap) and the Portuguese Communist Party (PCP) have announced new proposals for the 2027 State Budget. Fesap is demanding a base salary of 1,050 euros for civil servants, while the PCP proposes a national minimum wage of 1,100 euros and an interim pension increase of 50 euros.

Tensions escalated between the Socialist Party (Partido Socialista or PS) and Chega following accusations regarding fuel tax relief. José Luís Carneiro of the PS accused Chega of deceiving the public, while André Ventura rejected the claims and alleged that the PS is blocking tax reduction measures. Meanwhile, the Portuguese Communist Party (Partido Comunista Português or PCP) criticized both parties for failing to address the profits of major economic groups.

Around 80 people marched to the residence of Prime Minister Luís Montenegro in Espinho on September 12 to protest rising fuel prices and the cost of living. Organized by local entrepreneurs, the demonstration was blocked by police before reaching the home, with organizers demanding urgent financial relief from the government.