As much as the European Union flounders under economic headwinds, Portugal’s economy reports strong growth, beating out previous forecasts. In 2024, Portugal’s economy expanded by 1.9%, beating out the expected growth by 0.1%, with forecasts predicting that the economy would grow by 2.1% in 2025.

Additionally, last year saw a 2.7% rise in gross domestic product in the fourth quarter, according to Reuters. The National Statistics Institute attributes growth to an acceleration in private consumption brought about by rising wages and pensions along with tax cuts for families and businesses. As their neighbors Germany, France and Italy report less promising and remarkably more sluggish numbers, Portugal has seen its second year of strong economic growth.

Additionally, total employment increased by 1.2% last year, with the number of employed residents increasing by 25% since 2013, subsequently bolstering private consumption as many have more spending power than in years past.

The outlook for 2025 is similarly positive, but Finance Minister Joaquim Miranda Sarmento notes that global economic uncertainty is a factor in the nation’s future growth. “The fourth quarter numbers showed a significant economic acceleration,” Miranda Sarmento told a parliamentary committee according to Reuters. “These are still provisional numbers, but they indicate a good fourth quarter and bring greater robustness to our forecast of economic growth of 2.1% in 2025 despite external uncertainties.”

Potential trade wars between major economies across the world and worsening economies in fellow EU nations could weigh on Portugal despite their promising economic outlook. Tariffs from the United States could hurt certain markets in Portugal. U.S. President Donald Trump’s proposal of a 200% tariff on all wine, champagne and alcoholic products imported from Europe could hurt the Portuguese wine sector, where the United States is the second largest export market.

Portugal is shielded from one of the more pressing tariffs from the United States, the 25% tariff on all imported cars. According to the Portuguese Automobile Association (ACAP), many of the cars exported by the country are routed to other countries in the EU, however the country is not immune to the domino effect that could send many of the European auto industries into a tailspin.

“We are a country with automobile production capabilities, we have more than 300,000 vehicles produced in Portugal and this production is for export, but, above all, for the European Union, so there is no significant exposure of our national production to the United States here,” said ACAP secretary general Helder Pedro according to The Portugal News. “This is bad for the global economy because, ultimately, if companies are going to suffer from this tariff decision, it ends up having a domino effect and the entire economy is affected, all its industries and the automobile industry is no exception to this impact.”

Of the credit managers with customers in Portugal, about three quarters of sales are to existing customers and a quarter to new. Credit managers are offering 1–30-day terms and 61–90-day terms, according to FCIB’s Credit and Collections Survey, with customers being 32 days beyond terms on average. Half of respondents found that payment delays were increasing, with these delays largely being attributed to unwillingness to pay (75%), cultural norms (75%) and billing disputes (75%).

“Know your true Legal customer not, DBA or Trade Name and know the ultimate parent and family tree (5 Cs of Credit),” one respondent wrote.