Portugal’s Poverty Watch 2023 seeks to draw a picture of the country’s situation in terms of poverty and social exclusion, with a special focus on the current situation of high inflation and rising cost of living.
The truth is that inflation rose too quickly in 2022, with peaks between July and October last year. In response, the European Central Bank (ECB) raised interest rates in order to stabilise prices. According to the ECB, the aim is to return inflation to 2% in the medium term. But this increase in interest rates has had a considerable impact on housing loans, with Euribor rates (3, 6 and 12 months) rising continuously and resulting in an increase in the instalments owed by families to banks. The situation doesn’t promise to slow down, as on 14 September the ECB announced a further rise in inflation to 4%. The government has already answered to this situation by presenting new measures to stabilise housing loans.
This Poverty Watch does not focus solely on this situation, but rather on income issues, i.e., it seeks to analyse some of the income support measures that have been implemented, as families feel “crushed” by the continuous increase in spending. The aim is to combine a look at the national macroeconomic scenario and people’s social situation.
To this end, you can also see throughout the document some testimonies from people living in poverty who have reflected on these issues.
In methodological terms, Poverty Watch analyses the latest data available from official entities such as INE and Eurostat, taking into account the changes that have taken place in the country in the last year and since the previous Poverty Watch was published (September 2022).