Improved Public Health but Increased Poverty Among Workers: Examining the Portuguese Economic Model in the Voting Arena
In the eyes of paper statistics, Portugal's economy is thriving. Unemployment sits at a mere 6.4%, with growth reaching 1.9% of GDP in 2024, forecasted to reach 2% in 2025. Inflation has been reined in to 1.9% in March, public finances are balanced, and debt sits below the 100% mark (94.9% in 2024). Moreover, the Organisation for Economic Co-operation and Development reports a 6.7% increase in Portuguese disposable income in 2024.
But on the bustling streets, tension bubbles on the brink of the upcoming legislative elections on May 18. A public sector strike ignited on May 16, followed by a rail workers' strike that disrupted train traffic from May 7-14. Towards the end of April, airport ground staff and museum and monument officials downed tools. On April 6, a massive demonstration saw thousands of Lisbon and Porto residents take to the streets, demanding 15% wage hikes, housing crisis solutions, and improvements in the public health system.
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While the destination might seem rosy, underlying political, social, and economic factors brewing in Portugal fostered discontent:
Political instability and governance issues have unfolded disturbingly, with Portugal embarking on its third snap general election in three years—a state of political tumult not seen since the 1974 Carnation Revolution. Successive governments have been marred by corruption and power misuse scandals, eroding public trust in leadership and fuelling widespread disillusionment. Voters feel that political campaigns grow monotonous, failing to address the root causes of the nation's woes.
Immigration and social tensions have surged due to the sharp increase in immigration, tripling the legal immigrant population from under half a million in 2018 to over 1.5 million by early 2025. Impressive sectors, such as tourism and farming, have been bolstered by this influx. However, the announced expulsions of around 18,000 undocumented immigrants shortly before the election have contributed to accusations of political opportunism and intensified social frictions. Far-right parties like Chega, leveraging anti-immigrant sentiments, have gained significant traction.
Economic struggles for common citizens persist despite macroeconomic advancements. House prices have spiked by 135% since 2014 due to market speculation, tax breaks for the affluent, and mass tourism, making homeownership and affordable housing unattainable for working-class families and the youth. Wages remain stagnant, and the national minimum wage hovers around €870 monthly, while the average net wage peaks at €1,100. A staggering 16.6% of the population still risks poverty despite broader economic growth.
The crumbling state of public services serves as a stark reminder of the divide between macroeconomic indicators and daily realities for many Portuguese. The National Health Service, once a crucial safety net, has suffered due to prolonged austerity since 2009, leaving hundreds of thousands without access to primary healthcare. These deteriorating conditions fuel frustration among citizens and highlight the declining quality of life for many.
- In the realm of politics, ongoing discontent arises as Portugal experiences its third snap general election in three years, heightening political instability due to corruption and power misuse scandals that erode public trust.
- Economic struggle for common citizens persists despite positive macroeconomic advancements, as house prices spike due to market speculation, tax breaks, and mass tourism, making homeownership unaffordable.
- Crime and justice become a contentious issue as far-right parties, such as Chega, gain traction by leveraging anti-immigrant sentiments in the wake of increasing immigration and divisive announcements of expulsion of undocumented immigrants before the election.
