The Algarve’s economy grew faster than the national average in 2024, according to new data published by the National Statistics Institute (INE).
Figures cited by the regional development commission (CCDR Algarve) show that the Algarve recorded economic growth of 2.3%, above the national average of 2.1%, while increasing its share of Portugal’s GDP (gross domestic product) from 4.89% to 4.94%.
The data also point to a continued improvement in living standards. GDP per capita in the region reached €29,302, equivalent to 108% of the national average, up from 107% in 2023. Measured in purchasing power standards, the Algarve rose from 87% to 89% of the European Union average.
INE also revealed that employment continues to grow, with 268,000 people holding jobs in 2023, an increase of 4,000 year-on-year, while paid employment rose even more sharply, adding 8,000 workers compared with 2022, to a total of 205,000.
Apparent labour productivity stood at €46,400 per worker in 2024. Although slightly below the national figure (€47,700), the Algarve ranked fourth among Portugal’s nine NUTS II regions.
Tourism-related activities once again played a central role in regional growth. According to gross value added (GVA) data for 2023, accommodation and food services (€2.85 billion), real estate activities (€1.58 billion) and wholesale and retail trade (€1.36 billion) together accounted for just over half (50.3%) of the Algarve’s GVA.
Accommodation and food services was the strongest-performing sector, growing 13% year-on-year and accounting for 29% of total GVA growth between 2022 and 2023. Trade also expanded by 11.5%, while real estate recorded a 2.2% contraction.
Construction ranked as the fourth-largest contributor to regional GVA, with a 6.1% share, followed by health and social care, public administration and administrative support services, each contributing around 5%.
More recent data for 2024 confirm the same pattern. Trade, transport, storage, accommodation and food services together generated 40.4% of regional GVA, while real estate increased its share slightly to 13.9%. Combined, these two broad sectors accounted for 54.3% of the Algarve’s total value added.
Around 40% of GVA growth between 2023 and 2024 came from trade, transport and tourism-related activities, underlining the sector’s continued importance. The primary sector also gained weight, increasing its share of GVA to 3.8%.
