Portuguese plan to dine out less over recession and cost of living fears

Hiked interest rates in the Euro Zone to curb inflation resulting from two months of sky-high oil and gas prices, all feeding into higher monthly payments on mortgages, means that the Portuguese are already considering ways of cutting spending.

And high of the list of family budget cuts are eating out in restaurants, buying new clothes, and scaling down on holidays, particularly overseas.

According to a survey by Intercampus for Negócios, Correio da Manhã, CMTV and NOW, 56.8% of those canvassed who had mortgages said they were cutting or would cut other expenditure that was not owed to banks.

Some 28% said they were not planning on cuts, and 15.3% either said they didn’t know or didn’t reply.

From those who said they were making cuts or would do do, these cuts were varied. 82.1% in this group said cutting down on restaurants was a top priority, followed by clothing or accessories (73.9%), travel and non-vital trips (67.9%), and cultural products (61.9%).

Among the segments identified, at least half of those quizzed said holidays (45.5%), driving (33.6%), and food (21.6%).

Mortgage interest rates rose in March for the first time since January, 2024, reaching 3% making an average monthly mortgage repayment €402 – the highest since December, 2024.

Meanwhile, the implied interest rate eased in the two months that followed, settling at 3.065% in May.

However, the increased mortgage rate together with inflation affecting household budgets (inflation in May went up 3.3% like-for-like) on the back of the higher costs of raw energy materials means that the cost of living has risen overall.

Interestingly, only 23% of those surveyed said that they had rescheduled their mortgage repayments with the banks, meaning only 9% of all Portuguese from the calculations made.

Source: Intercampus; Credits: Jakub Zerdzicki, Pexels