To understand Portugal today you have to start from a date: 25 April 1974, when the Carnation Revolution ended 48 years of dictatorship. In half a century the country has moved from a poor agricultural economy with a colonial empire at war to a stable European democracy, a member of the European Union since 1986 and of the euro since 1999. It went through a severe financial crisis, with the international bailout of 2011-2014 (see the economic crisis), and came out with some of the soundest public finances in Europe. But knots remain: low wages, expensive housing and overstretched public services.
Politics
For decades Portuguese politics was dominated by two parties: the centre-left Socialist Party (PS) and the Social Democratic Party (PSD), centre-right despite its name (see how the state works). In recent years the picture has changed. After the resignation of Socialist António Costa in 2023, now President of the European Council, the 2024 and 2025 elections brought the Democratic Alliance (PSD and CDS) led by Luís Montenegro to power as a minority government. The big change is the rise of Chega, a right-wing populist party founded in 2019 by André Ventura, which in the May 2025 election became the second force in Parliament, ahead of the PS.
In the January-February 2026 presidential election the moderate Socialist António José Seguro beat André Ventura by a wide margin in the runoff, succeeding Marcelo Rebelo de Sousa. The president has limited but significant powers, such as vetoing laws and dissolving Parliament.
The economy
After the crisis, the Portuguese economy grew faster than the eurozone average, driven by tourism, exports and foreign investment, and the state has run budget surpluses, bringing public debt below 100% of GDP. Tourism has broken one record after another: Lisbon, Porto, the Algarve and Madeira welcome tens of millions of visitors a year. The country has also become a destination for start-ups and digital workers, with Lisbon's Web Summit as its showcase. Renewable energy, wind, solar and hydro, covers much of electricity production.
The open problems
The other side of the coin is the cost of living. Wages remain among the lowest in Western Europe: the minimum wage, paid over 14 instalments, is just over 900 euros gross a month in 2026, and the average salary is far below that of Spain or Italy. Meanwhile house prices and rents have soared, especially in Lisbon and Porto, driven by tourism, short-term lets and foreign buyers: many Portuguese have to live far from city centres or delay leaving their parents' home (see buying a home in Portugal). The national health service suffers from a shortage of family doctors and long waits (see healthcare).
Population and migration
Portugal has one of Europe's oldest populations and a very low birth rate. In recent years the population has grown again only thanks to immigration, which has brought more than a million and a half foreign residents, mostly Brazilians but also people from Portuguese-speaking Africa, South Asia and Europe (see immigration). At the same time, many young graduates continue to emigrate to countries with higher wages, a story repeated for centuries (see Portuguese emigration). Immigration has become central to political debate, and in 2025 Parliament approved stricter rules on entry and citizenship.
A changing society
Portugal remains Catholic by tradition, but society has secularised quickly: it legalised same-sex marriage in 2010, adopted a pioneering model on drugs in 2001 and passed a euthanasia law in 2023. The country has one of the highest levels of safety in the world and great openness towards foreigners. The challenges ahead are clear: raising wages, making housing affordable, adapting to climate change, which brings drought and ever more severe wildfires, and keeping the new generations at home.