Macro View

Portugal – 3Q25 gross earnings per employee increased on average 5.6%YoY nominal, wage increases are smoothly adjusting

(reading time: 2 mins)

Summing up, average wage increases, over the 3Q25, 5.6%YoY; below 12MMA; meanwhile, September increase, 5.3%YoY, was the lowest figure since December 2022. All in all, real wages increase remain close to 3%; stimulating domestic consumption; however nominal salaries are increasing at a slower pace, which means, real salaries increasing at lower growth rates. Over the coming quarters, lower real salaries increase should translate into a weaker domestic demand.

The Portuguese Statistic Institute has just released, 3Q25 gross monthly earnings per employee (per job).  

We highlight the following:

• The monthly average gross salary over the 3Q25 was €1 738 and last 12 months: €1 663;
• The average increase over the 3Q25 was 5.6%YoY and 12MMA (12 months moving average): 6.1%;
• Average Monthly increases were July: 6.0%YoY; August: 5.6% and September: 5.3%;
• Average Core CPI over the 3Q25 was 2.3% and last 12 months 2.4%;
• Separately, the labour cost index (working days adjusted), released yesterday, regarding the 3Q25, pointed to +4.70%YoY vs. average of the last 4 quarters +6.2%.  

Our comments: Nominal wage increases are smoothly adjusting, 5.3%YoY in September the lowest figure since December 2022. The trend is negative, smaller increases, however as inflation is slightly above 2%, real wage increase remains around 3%; which is a strong incentive to consumption. Even so, as wages increases adjust, domestic demand should also calm down.

Source: INE, AS Independent Research