Cost of living in Portugal in 2021

Portugal is among the EU countries with the lowest prices for food, essential goods, transport and utilities. However, prices here periodically change in almost all sectors of the economy – both upward and downward. The coming year 2021 will not be an exception to this rule – especially since the current state of affairs in many countries was directly influenced by the Covid-19 pandemic and the financial and economic crisis it caused.

True, the pandemic did not affect most areas of life in Portugal, and prices generally remained at the same level. This primarily concerns rental housing in cities and rural areas. According to calculations provided by the National Statistics Office (INE), the difference in the average rental price between January 4 and December 31, 2021 is expected to be 0.9997 – that is, it will remain virtually unchanged.

Cost of living in Portugal

This applies to all types of real estate, but on the condition that the tenant and the landlord do not change the terms of the agreement that has already been signed at this point. The freeze on rental prices throughout 2021 looked predictable, as average inflation over the last 12 months was negative (-0.01%) except for residential properties.

Inflation had no effect on highway tolls, which have increased steadily over the past four years: by 0.98% in 2019, by 1.42% in 2018, by 0.84% ​​in 2017 and by 0. 62% in 2016. According to official information published by the Office of Traffic and Transport (AMT), the cost of tickets for all types of public transport, including regional trains and electric trains, should remain at the same level.

Cost of living in Portugal

The only exception was the Alfa Pendular high-speed trains, tickets for which increased in price by 0.5% in early January. Thus, a round-trip voyage from Lisbon to Braga, in the north of the country, will now cost 48.8 euros (first class) and 34.4 euros (tourist class) per person versus 48.5 and 34.2 euros, respectively.

Despite the increase in the number of mobile network and Internet users, the main Portuguese operators (NOS, Vodafone and MEO) do not plan to make any significant tariff increases, and if this suddenly happens, it will be of a “targeted nature”, and all customers will be warned about this in advance.

It is quite possible that the price of bread and bakery products will rise, which representatives of the relevant industry associate with an increase in prices for raw materials and consumables, as well as with an increase in the minimum wage in Portugal. The latter before taxes will now be 665 euros per month instead of the previous 635 euros. The price increase will affect cigarettes and other tobacco products the most – on average, a pack for the end consumer will cost 0.1 euros more due to the recalculation of the tax made before the formation of the state budget for 2021.

The price reduction for Portuguese residents and local property owners will affect electricity – by 0.6%, if we are talking about the regulated energy market. There are about a million such consumers, and last year tariffs for them were also reduced – then by 0.4%. For comparison, in neighboring Spain, starting in January 2021, electricity became more expensive by 27%.

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