Economic growth has been above the EU average for much of the past decade, but GDP per capita stands at just 75% of that of the leading EU economies. As of 2007, Portuguese GDP grew 1.9%. The unemployment rate for 2008 (est.)is 7.6%.

Historically, the 19th century was a failure to Portugal as it was for Spain and other countries in southern Europe, and in the end of that century, Portugal entered a serious economic and financial crisis, thus it turned to colonial expansion in Africa, careless of internal reforms.

Industrialization boomed in the 1950s with Salazar's regime, leading to an average of 6% annual growth of the GDP between 1959 and 1963, 7% between 1965 and 1967, after lowering to 5,2% in 1964. Due to international crisis, the growth decrease largely. Since 1985, the country started its modernization in a very stable environment (1985 - to the present day) and it join the European Economic Community in 1986. Successive governments have done various reforms and privatized many state-controlled firms and liberalized key areas of the economy, including the financial and telecommunications sectors. Portugal developed an increasingly service-based economy and it was one of the eleven founding countries of the Euro in 1999, with very restrictive criteria, and began circulating its new currency on January 1, 2002 along with 12 other EU members.

More than half (50,8%) of continental Portugal is dedicated to agriculture. The south has developed an extensive monoculture on cereals and olive trees and the Douro Valley in vineyards. Olive trees (4,000 km²), vineyards (3,750 km²), wheat (3,000 km²) and corn (2,680 km²) are produced in vast areas. Portuguese wine and olive oil are specially appraised by nationals due to these products quality. Also, Portugal is a quality producer of fruits, namely the Algarve oranges, and Oeste region's Pera Rocha (a type of pear). Among other productions such has horticulture, floriculture, beet sugar, sunflower oil, and tobacco.

Natural resources, such has copses cover about 34% of the country, namely pine trees (13,500 km²), cork oak (6,800 km²), holm oak (5,340 km²), and the eucalyptus (2,430 km²). Cork is a major production, Portugal produces half of the world's cork. Significant mining resources are tungsten, tin, and uranium.

The major industries are the textile, footwear, leather, furniture, ceramics (highlighting the international popularity of Vista Alegre), and cork. Modern industries had developed significantly: oil refineries, petrochemistry, cement production, automotive and ship industries, electrical and electronics industries, machinery and paper industries. Portugal has an ambitious and well-planned complex of petrochemical industries in Sines. Automotive and other mechanical industries are located in Setúbal, Porto, Aveiro, Braga, Santarém, and Azambuja.

Portugal's balance of trade is negative. It buys mostly in the European Union: Spain, Germany, France, Italy, and the United Kingdom. It also sells most of its products within the union: Germany, Spain, and France are the main partners.