Portuguese Economic Performance 1250-2000

Portuguese economic performance 1250-2000
PORTUGUESE ECONOMIC PERFORMANCE 1250-2000

NUNO VALRIO
(ISEG Technical University of Lisbon)
= paper to be presented at section 36 of the 13th International Congress of Economic
History, Buenos Aires, 2002 =
Plan
1. Introduction.
2. Population.
3. Prices.
4. Nominal gross domestic product.
5. Conclusion.
Abstract
The purpose of this paper is to present educated guesses and estimates of per capita
gross domestic product for the Portuguese economy since the mid-13th century. The exercise is
based on official data for the period since 1953, retrospective national accounts for the 19th
century and the first half of the 20th century, population and urban population data, price and
monetary devaluation data and government revenue figures for previous centuries. The results
are tested against qualitative information available about prosperity and depression.
1. Introduction
The purpose of this paper is to present educated guesses and estimates of the main
macroeconomic variables for the Portuguese economy since the mid-13th century.
1250 is a good starting point for this exercise because it was around the mid-13th century
that Mainland Portugal took its present shape with the conquest of the Algarve1. This ended the
Portuguese participation in the endemic warfare of the Christian reconquest of the Iberian
Peninsula. A few years later (1253), a monetary reform gave Portugal a monetary system in
keeping with the Carolingian mould commonly used in Western Christendom at that time2.
2000 is a good closing point for this exercise because it allows a fifty-year interval for the
presentation of the series and does not involve too much risk in making projections from the
relevant variables.
Sections 2 to 4 present the bases of the figures proposed, by order of decreasing
robustness: population, prices, nominal gross domestic product. Section 5 presents a general
discussion of the results in comparison with qualitative data
2. Population
Tables A.1 and A.2 present the relevant population data for Mainland Portugal and for the
whole country, respectively.
Population censuses have been regularly held in Portugal since 1864. Thus, population
estimates for 1900 and 1950 can be based on census data. These consist of census figures
adjusted for the end of the year using vital statistics and emigration data. The 2000 figure is a
projection based on the 1991 census, provisional figures obtained for the 2001 census and vital
statistics and migration estimates for the 1990s.
After the conquest of the Western Algarve in 1249 (area 87 700 km2), there were only two
small changes made to the borders with neighbouring states: in 1297 (area increased to 89 500
km2), and in 1801 (area decreased to 89 000 km2). The archipelagos of Madeira (800 km2) and the
Azores (2 300 km2) were populated for the first time under Portuguese sovereignty during the first
half of the 15th century.
2
Until then, Portugal had shared the monetary system of its Muslim neighbours to the
south, in spite of religious and political conflicts.
During the first half of the 19th century, population counts based on ecclesiastical and
administrative information were made throughout the country. Although, during the first decade of
the century, such counts only covered Mainland Portugal and Madeira, it may be said that they
provide a firm basis for the 1800 figures and for linkage to the data obtained through the
censuses. The 1850 estimate is an interpolation between these data and the figure of the first
census.
Figures for earlier periods must rely on family counts made for fiscal and military purposes
only in Mainland Portugal. Although less reliable, they provide a good basis for the 1450-1800
figures. It is usually believed that the 1422, 1527, 1736, 1770 and 1801 counts provide a fairly
representative picture of the situation, that the 1636 count clearly underestimates the existing
population and that the 1776 count overestimates the existing population. Estimates for 1450,
1500, 1750 and 1800 are simply interpolations of the 1422, 1527, 1736, 1770 and 1801 counts.
In order to bridge the period between 1527 and 1736 without the 1636 count, I made the usual
assumption of a 17th-century stagnation at around 2 million, and interpolated the 1550 estimate
accordingly.
Estimates for the whole country were built using the estimates for Mainland Portugal and
based on the assumption that the Atlantic islands of Madeira and the Azores represented a
growing proportion of the population of Portugal, rising from 0% in 1400 to 8% in 18003.
Although some partial data exist for the medieval period, the 1250-1400 evolution must be
reckoned as a mere educated guess. I postulated a 1350 figure (intended to represent the
situation before the arrival of black death during the late 1340s) similar to the 1500 figure, a figure
for 1250 similar to the 1400 figure, and I assumed even growth between 1250 and 13504.
Urban population
As the evolution of the urban population may be used as a way of checking the general
economic evolution, it is useful to review the information available about the largest Portuguese
urban centres (see Table A3).
The percentage of the population of Madeira and the Azores in the total population of
Portugal peaked at around 9% in the mid-19th century and decreased thereafter. It is now slightly
less than 5%, according to the provisional figures of the 2001 census.
4
For an overall view of data about the Portuguese population, see Mata, Valrio, 1994,
and Baganha, 2001.
Quantitative sources are similar to the ones that were mentioned when dealing with the
total population. Moreover, there are a few qualitative sources available for the medieval and
modern periods, or, in other words, chronicles and town descriptions written for various purposes,
sometimes with not very accurate guesses about the size of the population.
Anyway, the general picture is clear. From the 13th century onwards, Lisbon overtook the
traditional ecclesiastical and political centres of the early medieval period (Braga and Coimbra)
and became the main commercial centre and the political capital of the kingdom. Its superiority
grew until the 16th century, when Lisbon monopolised the East India trade and became one of
the largest cities in Europe. During the 16th century, a few other centres began to grow: Oporto,
because of its important role in trade with Brazil, Coimbra and vora as university towns. During
the 17th century, stagnation came to Lisbon and the other centres, with the possible exception of
Oporto, because of the beginnings of the port wine trade. The 18th century saw a new
expansionary phase for Lisbon, because of the Brazilian trade, and for Oporto, because of the
port wine trade. Meanwhile, Coimbra stagnated, vora receded (as it ceased to be a university
centre), and a few other places reached the threshold of 10 thousand inhabitants. The end of the
Brazilian empire was a severe blow to Lisbon, which stagnated during the first half of the 19th
century, while Oporto kept on growing. From the mid-19th century onwards, there was a more or
less constant growth, which rose sharply during the second half of the 20th century.
3. Prices
The price index used in this exercise is based on Valrio, 1991, Valrio, 1997 and Valrio,
1998.
The 1900 and 1950 figures are gross domestic product deflators based on official figures
for the cost of living index published by the Portuguese statistical office (Instituto Nacional de
Estatstica). The 2000 figure for the deflator of gross domestic product is a provisional figure
presented in the annual report of the Board of Directors of the Bank of Portugal.
The 1500-1900 evolution was computed using the prices of basic foodstuffs, to which
textile and fuel prices were added for the 19th century.
The 1369-1500 evolution was computed using royal decrees that imposed increases in
nominal money rents.
The 1250 (or, to be more precise, 1253) -1369 evolution was computed using coin
depreciation data.
4. Nominal gross domestic product

Valrio, 1998 presents estimates for the evolution of Portuguese gross domestic product for
the period 1837-1993. These estimates provided the 1950, 1900 and 1850 figures used in this
exercise (to be precise, the 1850 figure is an interpolation of the 1848 and 1851 figures). The
2000 figure is a provisional figure presented in the annual report of the Board of Directors of the
Bank of Portugal.
The 1800 figure was computed using the same technique used in Valrio, 1998 for
generating pre-1953 figures and data on public accounts published in Silveira, 1987 and data on
foreign trade published by the Portuguese statistical office in 1968.
The only reliable macroeconomic data available for the period prior to the late 18th century
are money supply and government revenue figures. Tables B.1 and B.2 summarise these data.
Tables C.1 and C.2 present a first approach to an estimate of gross domestic product for
the period for which, respectively, money supply and government revenue figures are available,
assuming a constant ratio between these variables and gross domestic product, similar to the
1800 figure. Of course, these are rough estimates that must be examined mainly on the basis of
their plausibility.
It is clear that the estimates for the 18th century based on money supply present a very
irregular evolution, which may be attributed to the very special circumstances that made Portugal
(or, to be more precise, the Portuguese colony of Brazil) the worlds main gold producer
throughout most of the century. Estimates based on the government revenue figures seem much
more reliable for the whole period dating back to the 16th century, with the exception of the
estimate for 1518-1519, which seems too high, perhaps because of an exceptionally favourable
situation in regard to the East India trade that increased royal revenue.
The situation is quite different for the 14th and 15th centuries, because the estimates are
clearly too low. It must be assumed that, before the discovery of the Cape of Good Hope route to
India, the Portuguese royal exchequer was able to obtain only a very tiny proportion of the gross
domestic product.
5. Conclusion
Table C.3 presents a second approach to an estimate of Portuguese gross domestic
product for the whole period under consideration. Figures for the years 1800-2000 were
computed as explained above. Figures for the years 1550-1750 are based on the first approach
presented in section 4. They are interpolations of the estimates based on government revenue
figures, which have been slightly manipulated by using the hypothesis of a stagnation of per
capita gross domestic product during the 17th century. Figures for the years 1250-1500 are mere
educated guesses based on reasonable assumptions about the evolution of the countrys
economic situation. All figures were rounded off, in order to underline the tentative nature of the
exercise.
A low starting point was chosen for the 1250 per capita gross domestic product, and a rise
slightly above 0.2% per year was postulated for the late medieval period before the outbreak of
black death. This seems reasonable, because this period was characterised by peace and some
population and urban growth. In monetary terms, although there was some depreciation of the
Portuguese monetary unit (the Portuguese pound), this depreciation did not reach very significant
levels.
A fall to the 1250 level was postulated for 1400, accompanied by a decline in population
numbers, despite the rise in the proportion of the urban population5. A staggering inflationary
process, which, by the 1430s, had reduced the Portuguese pound to a value 2,500 times lower
than the one prevailing in the 1360s, may also be considered another factor of disturbance during
this period.
There then followed a recovery until 1450 to the 1350 level, once more keeping pace with
population and urban growth. This period was also characterised by the gradual control of the
inflationary process that had plagued the period after the end of black death.
A growth rate of around 0.3% per year between 1450 and 1600 may be justified by the
success of overseas explorations. Population and urban growth confirm the general positive trend
brought about by the arrival of gold, ivory and slaves from Africa, and, above all, spices from the
East Indies. Of course, it is reasonable to suppose that domestic economic activities were also
stimulated by colonial trade.
Stagnation in the growth of population, urbanisation and per capita gross domestic product
during the 17th century may be attributed to the closing of the new opportunities afforded by the
colonial endeavours. Political union with the Western Hapsburg Empire (1580-1640), followed by
the so-called War of Restoration (1640-1668), and the competition of France, England and,
above all, the Netherlands in the colonial world were traditionally blamed for the less than brilliant
development of Portuguese life during this period. This may be somewhat unfair to the efforts of
the Western Hapsburg Empire during the early stages of its government in Portugal (roughly until
1620), but the main point is that Brazilian sugar was the only colonial business to show any longterm prosperity for the whole of the century.
It should be noted that 1400 was, moreover, a war year.
Brazilian gold and port wine may explain the rather high figure for 1750, and war with
France and Spain the rather low figure for 18006. Nonetheless, the 18th century as a whole was a
century of population and urban growth, and it is possible to suggest that it also improved per
capita gross domestic product by more than 0.3% per year. The absence of any significant
industrial enterprise not based on some kind of government support must, however, be reckoned
as the most notable weakness of the Portuguese economy, precisely at the time when modern
economic growth first began in 18th century Britain.
Foreign and civil wars crippled economic growth during the first half of the 19th century. The
population showed a slight increase, but urbanisation stagnated. It is almost certain that it was
during this period that the Portuguese economy definitively acquired its significant state of
backwardness in comparison with the worlds leading economies, a situation that still persists to
this day.
From the mid-19th century onwards, there were more periods of economic growth than
periods of stagnation. As could be expected, economic growth was accompanied by population
and urban growth. Even so, until 1950, Portuguese economic growth was unable to keep pace
with the growth of the worlds leading economies, and barely exceeded the world average.
Moreover, the First World War put an end to four centuries of relatively stable money 7, heralding a
20th century of inflationary processes that reduced the value of the Portuguese escudo,
introduced in 1911, by an amount similar to that which occurred during the inflationary process in
the period immediately after the black death in late mediaeval times8.
Only during the second half of the 20th century did Portugal experience modern economic
growth in a Kuznetian sense. As a consequence, by the end of the millennium, the country had
become highly developed, although per capita gross domestic product was still clearly below the
figures recorded by the worlds leading economies9.
6
7
During that year the southern part of Mainland Portugal was invaded by a Spanish army.
The Portuguese real, which replaced the Portuguese pound in 1435, remained the
Portuguese currency unit until 1911, with an overall depreciation of less than 1% per year. For
more information on the history of the Portuguese real, see Macedo, Silva, Sousa, 2000.
8
9
For more information on the history of the Portuguese escudo, see Valrio 2001.
The same is true concerning the figures for the European Union (of which Portugal
became a member in 1986) and the Eurozone (into which Portugal was integrated in 1999).
Table A.1 Population of Mainland Portugal

figures in thousands
Year
censuses
counts
estimates
educated guesses
1250
1 000
1300
1 095
1350
1 200
1400
1422
1 000
1 043
1450
1 097
1500
1 202
1527
1 262
1550
1 554
1600
2 000
1636
1 100
1650
2 000
1700
2 000
1736
2 143
1750
2 410
1770
2 850
1776
3 352
1800
1801
2 929
2 932
Table A.2 Population of Portugal

Year
censuses
counts
estimates
educated guesses
1250
1 000
1300
1 095
1350
1 200
1400
1 000
1450
1 110
1500
1 225
1550
1 600
1600
2 080
1650
2 100
1700
2 120
1750
2 580
1800
3 165
1820
3 261
1841
3 737
1850
3 850
1864
4 188
1878
4 551
1890
5 050
1900
5 423
1911
5 962
1920
6 033
1930
6 826
1940
7 724
1950
8 510
1960
8 889
1970
8 663
1981
9 833
Year
censuses
5 450
8 512
counts
estimates
educated guesses
1991
9 832
2000
2001
10 308
10 318
10
Table A.3 Portuguese urban centres (with populations over

10 thousand inhabitants)
year
Lisbon Oporto
other centres
total urban population
ratio to total population
1250
15
<10
15
0.01
1300
20
< 10
20
0.02
1350
25
< 10
25
0.02
1400
30
< 10
30
0.03
1450
40
< 10
40
0.04
1500
50
< 10
50
0.04
1550
75
< 10
75
0.05
1600
100
10
(Coimbra + vora) 20
130
0.06
1650
100
10
(Coimbra + vora) 20
130
0.06
1700
100
10
(Coimbra + vora) 20
130
0.06
1750
150
25
(Coimbra + vora) 25
200
0.08
1800
200
50
(6 centres) 65
315
0.10
1850
190
76
(6 centres) 76
342
0.09
1900
356
168
(10 centres) 135
659
0.12
1950
* 994
** 500
(25 centres) 460
1 954
0.23
* 2 371 ** 1 119
(44 centres) 1340
4 830
0.47
2000
* Greater Lisbon
** Greater Oporto
11
Table B.1 Money supply

Source Sousa, 1999.
figures in contos (1 conto 5 euros)
Year
money supply
1700
5 857
1716
17 687
1750
33 648
1763
41 773
1797
55 772
Note The source provides yearly estimates. Only the estimates used for calculations are
presented here.
12
Table B.2 Government revenue

Source Godinho, 1978.
figures in contos (1 conto 5 euros)
Year
revenue
1367
0,0285
1402
0,212
1477
43
1506
200
1518-1519
309
1588
1 111
1607
1 440
1619
1 556
1681
1 665
1716
3 792
1763
5 881
13
Table C.1 Portuguese economic performance 1700-1800:

first approach based on money supply
year
nominal gross
price
population
per capita gross
domestic product
index
(thousands)
domestic product
(contos)
(basis 2000
(contos, 2000 prices)
=1000)
1700
26 254
0.37
2 120
33
1716
79 283
0.39
2 257
90
1750
150 828
0.44
2 580
133
1763
187 249
0.43
2 721
160
(1 conto 5 euros)
14
Table C.2 Portuguese economic performance 1367-1763:

first approach based on government revenue
Year
nominal gross
price
population
per capita gross
domestic product
index
(thousands)
domestic product
(contos)
(basis 2000
=1000)
1367
0.7125
0.00006
1 128
11
1402
5.3
0.0009
1 004
1477
1 075
0.06
1 171
15
1506
5 000
0.06
1 265
66
1518-1519
7 725
0.06
1 356
95
1588
27 775
0.26
1 953
55
1607
36 000
0.30
2 083
58
1619
38 900
0.25
2 088
75
1681
41 625
0.27
2 112
73
1716
94 800
0.39
2 257
108
1763
147 025
0.43
2 721
126
(1 conto 5 euros)
15
Table C.3 Portuguese economic performance 1250-2000: a

summary
Year
nominal gross
price index
population
per capita gross
domestic product (basis 200 =1000)
(thousands)
domestic product
(contos)
1250
1.2
0.00003
1 000
40
1300
2.0
0.00004
1 095
45
1350
3.6
0.00006
1 200
50
1400
36
0.0009
1 000
40
1450
2 300
0.042
1 110
50
1500
4 400
0.06
1 225
60
1550
11 000
0.10
1 600
70
1600
45 000
0.27
2 080
80
1650
55 000
0.33
2 100
80
1700
65 000
0.37
2 120
80
1750
130 000
0.44
2 580
115
1800
250 000
1.03
3 165
75
1850
250 000
0.55
3 850
120
1900
1 020 000
0.93
5 450
200
1950
50 665 000
20
8 510
300
2000
30 000 000 000
1 000
10 000
3 000
(1 conto 5 euros)
16
References
BAGANHA, Maria Joannis Population. In Valrio, Nuno Portuguese historical statistics
(2 volumes). Instituto Nacional de Estatstica, Lisbon, 2001.
GODINHO, Vitorino Magalhes Godinho Finanas pblicas e estrutura do Estado. In
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Editoriais, Lisbon, 1979. Reprinted in: Ensaios volume II (2nd ed.). S da Costa Editora, Lisbon,
1978.
MACEDO, Jorge Braga de; SILVA, lvaro Ferreira da; SOUSA, Rita War, taxes and gold:
the inheritance of the real. Working paper no. 8/2000, Departamento de Economia, Instituto
Superior de Economia e Gesto da Universidade Tcnica de Lisboa, 2000.
MATA, Eugnia; VALRIO, Nuno Histria econmica de Portugal uma perspectiva
global. Presena, Lisbon, 1994.
SILVEIRA, Lus Espinha da Aspectos da evoluo das finanas pblicas portuguesas
(1800-1827). In Anlise Social, no. 97, 1987.
SOUSA, Rita Moeda e metais preciosos no Portugal setecentista (1688-1797) Ph. D.
thesis presented at the Instituto Superior de Economia e Gesto da Universidade Tcnica de
Lisboa, 1999.
VALRIO, Nuno Periodizao da histria monetria de Portugal In Estudos de
Economia, volume XII, no. 1, 1991.
VALRIO, Nuno Os preos em Portugal (sculos 13 a 20) In Reis, Jaime; Dias, Ftima
Sequeira; Fonseca, Helder Histria do crescimento econmico em Portugal Associao
Portuguesa de Histria Econmica e Social, Ponta Delgada, 1997.
VALRIO, Nuno Recent developments on Portuguese retrospective national accounts.
Working paper no. 12, Gabinete de Histria Econmica e Social, Instituto Superior de Economia e
Gesto da Universidade Tcnica de Lisboa, 1998.
VALRIO, Nuno O escudo a unidade monetria portuguesa 1911-2001 / The escudo
the Portuguese currency unit 1911-2001. Banco de Portugal, Lisbon, 2001.
17

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