Cost of living in Portugal: prices in 2021

Electricity prices fall, while rent, public transport and tolls remain unchanged. Let's have a look at what we know about prices in Portugal for some of the most common products and services.

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Photo by Manuel Will on Unsplash
13 January 2021, Redaction

How much does it cost to live in Portugal in 2021? What will become more expensive in Portugal in 2021, and what products and/or goods will cost the same or lower this year? Rent and tolls, two areas where price changes are dictated by inflation, will remain unchanged this year, while electricity is set to become cheaper, at least for those who remain in the regulated market. The new year will, however, bring increases in the selling price of tobacco and high-speed rail travel (on the Alfa Pendular), but not in CP's (Trains of Portugal's) other services, whose prices remain unchanged compared to 2020. Public transport is in the section of products and services which will not increase in 2021 in Portugal. Let's have a closer look at the cost of living in Portugal, by having a look at prices in 2021

Electricity prices in Portugal in 2021

The price of electricity for consumers in the regulated market in Portugal will fall by 0.6%, according to the Energy Services Regulatory Authority (ERSE).

This drop will benefit consumers who still remain in the regulated market - less than one million - or who, being in the free market, have opted for a similar tariff. This comes after ERSE had already decided to lower these electricity tariffs by 0.4% in 2020.

Rental prices in Portugal

The update coefficient for urban and rural rent in Portugal, calculated by INE (the National Statistics Office) for the period between 4th Janurary 2021 and 31st December 2021 is 0.9997, which in practice dictates that rental prices in Portugal will not change compared to last year.

This update coefficient is applicable to deregulated rentals, for housing with conditional rent and for non-residential rent, if the parties, tenant and landlord, have not agreed different conditions.

The freeze on rental prices in Portugal in 2021 was already expected as the average inflation of the last 12 months without housing, the benchmark indicator, was negative (-0.01%).

The cost of a loaf of bread

The increase in the national minimum wage from 635 to 665 euros could dictate an increase in the selling price of bread in Portugal, from the perspective of the bakery industry.

"Looking at the economic and financial situation of the country, with news of an increase in the national minimum wage for 2021 and a gradual increase in the price of raw materials, we can foresee that this will be reflected in the price of bread," said the Association of Commerce and Industry of Bakery, Pastry and Similar Products (ACIP). 

Toll prices in Portugal

Motorway toll prices in Portugal in 2021 are expected to continue as they were in 2020. The stabilisation of toll prices in 2020 and 2021 follows 4 consecutive years of rises: in 2019 motorway tolls rose by 0.98%, after increases of 1.42% in 2018, 0.84% in 2017 and 0.62% in 2016.

Public transport

Prices for public passenger transport will also remain unchanged in Portugal in 2021, according to information released by the Mobility and Transport Authority (AMT).

Prices for Alfa Pendular high-speed train trips are an exception, as they increased by 0.5% from the beginning of January.

With this in mind, a one-way trip on the Alfa Pendular high-speed train between Lisbon and Braga will go from 48.50 euros (first class) and 34.20 euros (tourist class) to 48.80 euros and 34.40 euros respectively.

Telecommunications

NOS, a Portuguese telecommunications and media company, has stated that it will not update prices in 2021, the operator's official source told the news agency Lusa, while Vodafone told Lusa that "like last year, no general price increases are planned".

MEO, one of Portugal's mobile and fixed telecommunications services, said that it will carry out a monthly basic price update in tariffs/packages in 2021, according to the contractual provisions, with the customers affected being duly and timely informed.

Tobacco prices

The State Budget for 2021 in Portugal changes the formula for calculating tobacco tax (IT), which, according to the calculations made by the Deloitte consultancy firm, is to be reflected in a tax increase of around five cents per packet of cigarettes and which "is expected to correspond to an increase of 10 cents in the retail selling price of a packet". The rate of this tax is not updated in the same way as the rates of other consumption taxes in Portugal.

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