Portugal's trade gap shrank by €393m in July. Take one line out and it grew
Statistics Portugal published July's goods trade figures on Wednesday. The deficit came in at €3,052m, €393m better than a year earlier. Strip out goods that cross the border for processing without ever changing owner and it was €3,065m, or €65m worse.
July produced two trade deficits, and they point in opposite directions.
The first one is the figure that will travel. Goods exports rose 6.5% on the year and imports rose just 0.6%. Because sales grew far faster than purchases, the goods trade deficit closed the month at €3,052m, an improvement of €393m on July last year, according to the release Statistics Portugal put out on Wednesday.
The second deficit sits in the same document, a few lines further down. INE also calculates the balance without what it calls transactions with no transfer of ownership: goods that cross the border to be worked on under contract and then cross back, never changing hands. Take that line out and July’s deficit was €3,065m. Instead of narrowing by €393m, it widened by €65m.
The whole gap between the two is on the import side. With those transactions counted, imports rose 0.6%. Without them, 5.5%, close to ten times as much. Exports barely move between the two versions: 6.5% and 7.0%.
How much of this is price rather than goods
There is a second reading in the same release, and it applies to both versions. The unit value index for exports, which is INE’s price measure, rose 5.6% in July. The import index rose 5.1%, its fourth consecutive annual increase.
The subtraction is worth doing. Exports were worth 6.5% more than a year ago, and the prices they left at were 5.6% higher. That leaves very little for volume, meaning actual extra goods leaving the country.
In July 2025 both indices were negative, at -1.9% for exports and -3.0% for imports. That is part of why the 2026 comparisons look so comfortable. The base is cheap.
None of this makes July a bad month. June was much stronger on both flows, at +10.7% for exports and +19.6% for imports, and the sharp braking in purchases from abroad is real enough. It is the same backdrop in which Fitch moved the sovereign up to A+ last week, though the company data tells a cooler story: 36,124 businesses were set up through August, and only construction and IT created more of them than in 2025.
What changes is the sentence. Saying the trade deficit improved in July means naming which of the two sets of books you are quoting, because the other one says the opposite.
By Beatriz Mota
Photo: Nuno Morão / Wikimedia Commons (CC BY-SA 2.0)
