Portuguese more at risk of poverty in 2021, first setback since 2014

People in Portugal were more at risk of poverty or social exclusion in 2021. The first setback for this indicator of increased income inequalities in the country since 2014.

Street in Lisbon, Portugal
Lisbon, Portugal © jötâkå , 2018

The at-risk-of-poverty rate amounted to 18.4 percent of the Portuguese population in 2021, according to Eurostat data. This rate was up 2.2 percentage points from 16.2 percent in 2020, the largest increase among the 27 European Union member states and the first in Portugal since 2014.

On October 17, the International Day of Poverty, the statistics portal Pordata shared that Portugal is the sixth EU country with the highest share of employed workers with incomes below the poverty rate, meaning that more than one Portuguese in ten earns less than 6,653 euros gross a year.

Low income is one of the reasons why many young Portuguese want to leave the country. Meanwhile, 72 percent of pensioners lived with less than 665 euros a month in 2021.

“Portugal has deviated from the poverty reduction path it had been following since 2014,” said Luísa Louro, the director of Pordata to Diário de Noticias.

The at-risk-of-poverty rate shows the share of people with disposable income after social transfers that are lower than 60 percent of the national median income after social transfers. This indicator allows showing differences in income between residents in a country, suggesting that people with low income in Portugal suffered the most from growing income inequalities compared to other European Union members.

However, the at-risk-of-poverty rate doesn’t measure wealth or poverty, and doesn’t necessarily imply a low standard of living. Some pensioners may have low income but substantial savings for instance.

Portugal has experienced the highest at-risk-of-poverty rate increase of the EU before Greece, whose rate had not increased since 2012 but grew by 1.9 percentage point in 2021 to reach 19.6 percent. Hungary also didn’t experience an increase since 2013 but it has worsened by 0.4 percentage point and the at-risk-of-poverty rate is now 12.7 percent after social transfers, according to Eurostat. Cyprus is now the country with the longest continuous improvement, with a decline in the at-risk-poverty rate for six consecutive years.

Portugal has now the 10th largest share of the population at risk of poverty in the European Union, whose average was 16.8 percent in 2021, up 0.1 percentage point from 2020. Latvia, with 23.4 percent, shows the highest risk of poverty after social transfers.

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