Increase in Consumer Credit: Portuguese Borrowing Up by 13.4% in June
Portugal's consumer credit market has experienced a significant surge in the first half of 2025, with a 34% increase in production [1]. This growth has been driven by easing credit conditions, wage growth, and increased consumer spending [1]. According to Caixa Geral de Depósitos, the market leader in individual loans, the portfolio grew 13% year-on-year to €1.292 billion [2].
A large portion of this credit, approximately 294 million euros, was allocated to the acquisition of new and used cars [6]. The demand for car purchases, often financed through consumer credit and credit cards, has been robust, with the amount spent on used car purchases alone reaching 215 million euros [6]. Despite a decrease from the previous month, this figure still represented a 10.4% increase compared to 2024 [6].
The average amount of debt per used vehicle was around 15,000 euros [3]. Meanwhile, the youth segment (under 35) accounts for more than half of the contracted consumer credit, benefiting from government incentives and fee exemptions [2]. Portugal’s digital banking sector is expanding rapidly, with online sales constituting over 80% of new business [2].
However, this growth brings potential risks. Loan delinquencies have been on the rise, a concern also seen in other markets [5]. While the European Central Bank notes a slight increase in households reporting tighter credit access in the past year, expectations for easing credit conditions remain mildly positive [3]. Experts warn of the need for caution due to rising inflation and expected economic and international instability [7].
It's important to remember that a personal loan may seem harmless today but could become a serious problem tomorrow. The decrease in housing loan rates has conveyed a sense of security for resorting to credit, but rising inflation and potential economic instability should be taken into account [7].
Credit card purchases and credit lines increased by 7.3%, totaling approximately 113 million euros [4]. Despite high-interest rates above 19% in the second quarter of the year [4], credit cards continue to be popular, with 73% of CGD's customers active digitally [2].
In summary, Portugal’s consumer credit growth supports car financing and digital banking amid strong economic momentum. However, vigilance is needed regarding loan delinquencies and potential tightening credit conditions as risks [1][2][3][5].
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