2021: the main price trends in Portugal

January 7, 2021

That’s it, we’re in 2021! A new year begins and, as every year, it brings with it a few price changes in Portugal. These changes occur in various sectors: electricity, transport, telecommunications… and have a direct impact on the cost of living. These tariffs are for the most part assessed by the government every year, and are based on various criteria including taxes, the minimum wage, inflation… 2020 being a year like no other, tariff evolutions for 2021 are different from other years, with – good news – fewer increases than usual. Let’s take a look at the price trends in Portugal for 2021(non-exhaustive list). If you’d like to find out more, read my article on the cost of living in Portugal.

Wages: minimum wage increase

Portugal is raising the national minimum wage to €665 gross paid over 14 months from €635 in 2020. The Portuguese government aims to reach €750 by 2023. The table below shows minimum wage increases in Portugal over the last 10 years.

If you’d like to find out more about working in Portugal: salaries, vacancies, sectors recruiting, search sites… I invite you to read or re-read my article “Working in Portugal”.

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Minimum wage in Portugal – Source : economias.pt

Even with this pay rise, Portugal remains among the European countries with a fairly low minimum wage. Below you’ll find the ranking of minimum wages in Europe (2019 data). Portugal ranks 12th out of 21.

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EU wage ranking – Source: economias.pt

Electricity: up to -30 euros a year on your bill

Portugal is a country where electricity is relatively expensive. It is more than 20% more expensive than in France. Below is a table comparing electricity prices in Europe.

According to the Energy Services Regulatory Authority(ERSE), electricity prices for consumers on the regulated market(less than one million people) will fall by 0.6% in 2021. This 0.6% reduction in tariffs in 2021 is accompanied by a 13% reduction in VAT, which will save between 20 and 30 euros a year on electricity bills.

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EU electricity tariffs (2018 data) – Source : Eurostat.eu

Rents: no increase planned

The update coefficient for urban and rural leases calculated by INE (Institut National de la Statistique) for 2021 is 0.9997, meaning that rental prices will remain unchanged. The freeze on rents in 2021 had already been forecast since last summer, since average inflation over the last 12 months, excluding housing, an indicator used as a benchmark, was negative (-0.01%).

There is therefore no rent increase for 2021. Note that in 2020, the increase was 0.51%, in 2019 1.15% and in 2018 1.12%.

If you’d like to find out more about renting in Portugal: difficulties, prices, regulations, searches, I invite you to read or reread my article “Finding a rental in Portugal”.

Motorway tolls: stabilization in 2021

Each year, toll price increases are based on the year-on-year inflation rate, without housing, in Portugal. This year, motorway toll prices are not increasing. The stabilization of toll prices in 2020 and 2021 follows four consecutive years of increases: 0.98% in 2019, 1.42% in 2018, 0.84% in 2017 and 0.62% in 2016.

Public transport: prices unchanged in 2021

Public transport fares will remain unchanged in 2021, according to information published by the AMT (Mobility and Transport Authority).

Alfa Pendular fares are an exception, increasing by 0.5% in 2021. For example, a one-way ticket on Alfa Pendular between Lisbon and Braga will rise from €48.50 to €48.80 in comfort class, and from €34.20 to €34.40 in tourist class.

Tobacco: increase of 10 cents per pack

A pack of cigarettes in Portugal is relatively inexpensive compared with its European neighbors. For example, a pack of cigarettes(Marlboro) in Portugal will cost an average of €5, compared with twice that in France.

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EU cigarette pack prices – Source : touteleurope.eu

The price of a pack of tobacco will rise slightly in Portugal in 2021. An increase of 10 cents according to consultant Deloitte, based on the proposed state budget for 2021(OE2021).

Retirement: increases

Those receiving up to 658.2 euros in pension (equal to or less than 1.5 times the value of the welfare index) will be entitled to a 10 euro increase. Pensions for work-related accidents (disability or death) will be increased by 0.7%. Finally, the normal retirement age will be raised by one month to 66 years and 6 months.

Fuel: new carbon tax

In Portugal, in 2021, consumers will pay a new carbon tax of €0.54/liter on gasoline and €0.58/liter on diesel.

It should be noted that petrol prices in Portugal are more or less the same as in France, and generally relatively high compared with their European neighbors.

Below, you’ll find the prices charged in various European countries at the end of 2020. On December 28, 2020, prices in Portugal were as follows: €1,426 per liter for gasoline (vs. €1,368 in France) and €1,277 per liter for diesel (vs. €1,294 in France).

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EU fuel prices, 12-28-2020 – Source : cargopedia.pt

Telecommunications: MEO raises its tariffs

Internet, telephone, television … These services are offered mainly by 3 companies in Portugal: NOS, MEO, and Vodafone.

In principle, NOS and Vodafone will not be increasing their rates this year, while MEO has declared that a monthly update of basic prices in tariffs and packages, in accordance with the contract, will be carried out.

In conclusion

So there are no major price increases in Portugal for 2021. Many of you are wondering about the cost of living in Portugal. Below is an estimate of the cost of living in Portugal for a single person living in Porto. This is just an example, and will of course depend on individual lifestyles, but it may give you an initial idea.

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