Economists from the banking regulator conclude that the well-being index in Portugal increased at an average of 2.7% per year, between 1995 and 2022, revealing a process of convergence with the EU.

The well-being index assesses greater consumption, leisure time, life expectancy, and less inequality and allows the integration of components not included in the analysis based only on GDP per capita, with the aim of avoiding focusing public policies solely on increasing the country's income.

In Portugal, the average growth in well-being reflected the increase in per capita consumption and average life expectancy, with a contribution of 1.3 percentage points (pp.) each and, to a lesser extent, the reduction in inequality, while the contribution of leisure variation was null.

The conclusion of the Bank of Portugal (BdP) on the convergence of Portugal with the EU in terms of well-being, contrasts with that obtained based on the analysis of GDP per capita, where no progress is observed in approaching EU values among 1995 and 2022.

The analysis indicates that "in Portugal, the deviation between the average growth of the two measures was 1.5 pp. --- the third largest among EU countries".

Isolating the year 2022, the well-being index in Portugal stood at 87%, which means that consumption in the EU would have to be reduced by 13% for it to be indifferent to a citizen living in Portugal or in an economy with the characteristics of the EU average.

"All factors, with the exception of average life expectancy --- higher in Portugal ---, contribute to the lower standard of living compared to the EU", indicate the economists, who point out that the difference in per capita consumption explains the greater proportion of the negative differential.

According to the analysis, Portugal moves from 20th in the ranking based on GDP per capita to 16th using the well-being measure.

"The greater weight of consumption in GDP in Portugal and the greater average life expectancy enhance this result, more than offsetting the negative effect of inequality and higher hours worked than in the EU".