The Algarve is the EU's 2nd region with highest GDP loss since pre-pandemic times

With a drop of 13.8% in 2021, the Algarve was one of the regions in Europe that saw real GDP fall by up to 15% in 2021 compared to 2019.

The Algarve economy is highly reliant on tourism Dahee Son on Unsplash

Editorial Team

20 March 2023, 10:21

In 2021, the Algarve was the second region in Europe with the greatest loss of wealth compared to 2019, that is, compared to the pre-pandemic period. Only the Balearic Islands, in Spain, had a greater fall in real GDP during the two periods under review. This is one of the conclusions to be drawn from the data released at the end of February by Eurostat. They indicate that most of Portugal's territory has a per capita GDP of less than 75% of the European average.

Portugal's southernmost region is known for its beautiful beaches, warm climate, and tourism industry. This means that the region's economy is heavily reliant on the tourism sector, which accounts for a significant portion of its Gross Domestic Product (GDP). According to the Portuguese newspaper Expresso, which relies precisely on the European statistics office, the Algarve, with a drop of 13.8% in 2021, was one of the European regions that saw its real GDP - measured at constant prices, that is, without taking into account the impact of inflation - fall by up to 15% in 2021 compared to 2019. The Balearic Islands and the Algarve are joined by the Canary Islands, also in Spain and another region where tourism is the driving force.

The European regions that recorded the highest increases in real GDP in 2021 compared to 2019 were those corresponding to the south, east and interior of Ireland (Southern, Eastern and Midland), with positive changes of 28.4%, 15.4%, and 14.1%, respectively.

Eurostat

Eurostat concludes that in 2021, there were 79 regions with a higher GDP than in the last pre-pandemic year.

For Portugal, most of the country has a per capita GDP below 75% of the European average. Only the regions of Lisbon and Algarve (with 96% and 76%, respectively) escape, and the regions of Norte (65%), Centro (66%), Azores (66%), Madeira (70%) and Alentejo (71%) are further away from the wealth generated in average terms in the EU. The Alentejo region was, moreover, at a national level, the region that had the largest increase in GDP in 2021: a growth of 6.8%, in this case compared to 2020.