Portugal

Reduction of trade barriers with Spain would boost GDP by 0.4%

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Based on a feed excerpt; full article content has not been acquired. Source evidence retrieved 22/10/2026, 16:11:24 UTC.

Briefings

A study by Portuguese and Spanish economists estimates that reducing implicit trade barriers to 50% of current levels could boost Portugal's GDP by 0.4% and Spain's by 0.1% over four decades. The analysis, titled 'Perspectives on Iberian Economic Integration,' identifies services as the main area of incomplete integration, noting that 60% of EU market barriers exist from 20 years ago. Key findings include asymmetric bilateral mobility, with more Portuguese workers moving to Spain than Spanish workers to Portugal, and significant wage disparities. The evidence also highlights successful electricity market integration in Iberia, where wholesale prices differ by less than one euro per MWh in 95% of hours, contrasting with selective capital market links.

Key points

• A 50% reduction in implicit trade barriers could increase Portugal's GDP by 0.4% and Spain's by 0.1% over four decades.
• Services remain the primary area of incomplete integration between Portugal and Spain, with 60% of EU market barriers existing from 20 years ago.

Context

The analysis comes from a study by economists at the Banco de Portugal and Banco de Spain, published in a paper titled 'Perspectives on Iberian Economic Integration.' It examines the potential for deeper economic integration through reduced trade barriers, noting that while the Iberian market is integrated, significant structural and sector-specific obstacles persist.

Limitations

The study relies on estimates from a 2026 analysis and does not account for all non-tariff barriers or regulatory obstacles. Mobility data is limited to student and worker flows, and wage differences are noted but not quantified in specific figures.

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