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Summing up, average wage increases, over the 4Q25, 5.3%YoY; below 12MMA, 5.8%; meanwhile, December increase, 5.1%YoY, the lowest figure since December 2022. Nevertheless, real wages increase remain close to 3%; incentivizing domestic consumption; while the Balance of Goods remains strongly negative. Finally, the labour cost index is also increasing above the Euro Area cost index, being negative in terms of competitiveness.

The Portuguese Statistic Institute released Friday, the 4Q25 gross monthly earnings per employee (per job).  

We highlight the following:

• The monthly average gross salary over the 4Q25 was €1 741 and last 12 months: €1 686;
• The average increase over the 4Q25 was 5.3%YoY and 12MMA (12 months moving average): 5.8%;
• Average Monthly increases were Oct: 5.3%YoY; November: 5.4% and December: 5.1%;
• Average Core CPI over the 4Q25 was 2.1% and last 12 months 2.2% (Headline: 2.2% and 2.3; respectively);
• Separately, the labour cost index (working days adjusted), also released Friday, regarding the 4Q25, pointed to +6.90%YoY vs. average of the last 4 quarters +5.4%;
• The labour cost Index in the Euro Area, was 3Q25: 3.4% (last data available).    

Our comments: Nominal wage increases are smoothly adjusting, 5.1%YoY in December, the lowest figure since December 2022. The trend is negative, smaller increases, however as inflation is slightly above 2%, real wage increases remain around 3%; which is a strong incentive to the domestic demand and consumption, while the Goods balance remains strongly negative, above 9% of GDP. Finally, the labour cost index in Portugal remains above the Euro Area, which is negative in terms of competitiveness.  

Source: INE, AS Independent Research