Portugal’s Atlantic archipelagos continued to expand economically in 2024, even as the pace of growth cooled compared with previous years, offering a mixed but steady picture of regional performance. New figures show that both the Azores and Madeira remained on a positive trajectory, supported tourism, services, and overall economic resilience, though neither region matched the stronger momentum seen earlier in the decade. In the Azores, economic output rose 2.3 percent in real terms, slightly above national growth, with tourism and related services once again acting as the main engine. Despite outperforming the mainland average, the region’s overall output still lagged behind both national and European benchmarks, reinforcing the sense that growth alone has not yet closed long-standing structural gaps. Even so, the figures point to a regional economy that remains active rather than stalled.
Madeira followed a similar pattern, recording economic growth of 1.5 percent in 2024, a notable slowdown from the previous year and below the national average. The deceleration was linked mainly to reduced activity in services provided to companies, particularly those connected to the island’s international business centre. Yet beneath the slower headline growth, Madeira continued a longer-term trend of convergence with the broader European economy, narrowing the gap for a fourth consecutive year. Regional output reached more than 88 percent of the European Union average, a meaningful improvement that suggests underlying stability despite short-term moderation. At the same time, regional public administration maintained a balanced budget position, reinforcing confidence that slower growth has not translated into fiscal instability or loss of control over public finances.
Public debt trends offered another layer to the story, with both regions contributing to a decline in Portugal’s overall public debt ratio, which fell to its lowest level in more than a decade. Madeira maintained a budget surplus and reduced its debt burden further, reaching its lowest ratio since 2009, helped stronger output and disciplined financial management. The Azores, contrast, saw its budget deficit widen due to higher public spending and the integration of regional aviation companies into public accounts. Despite that, its debt ratio continued to fall for a second consecutive year, supported nominal economic growth. While rising debt levels in the Azores remain a concern for long term sustainability, the broader picture across both archipelagos suggests cautious progress rather than reversal. Growth may be slower, but it remains firmly positive.
