The Algarve Economy

Tourism has driven the region’s economy, the tertiary sector now accounting for a high percentage of total employment and regional GVA. This has led to an imbalance in employment distribution, with 75% of employment being concentrated on the coastal strip. Heavy reliance on the tourism industry has made the economy very vulnerable to the recent economic crisis and has led to growing unemployment, estimated at 11.9% at the end of 2009, surpassing the national figure of 10.1%. As many of the local inhabitants are engaged in seasonal employment, varying between fishing, tourism-related activities or agriculture, it is difficult to determine precise employment figures in the region.

Other traditional economic sectors in the Algarve, namely fishing and agriculture, have increasingly lost ground to tourism over the years. Agriculture continues to be the livelihood of the inland inhabitants, with agricultural products including citrus fruits, figs, almonds, carob beans, strawberry trees and cork oaks. The Algarve’s traditional fishing industry has declined considerably as a result of EU-imposed reduced fishing quotas, reliance on outdated fishing vessels, the advent of tourism and the ageing of the fishing population. Fish farming and aquaculture have been gaining importance over the past few years with clam and oyster farming now accounting for 90% of national production. The Algarve’s timeless salt mining industry represents approximately 90% of national sea salt production although the tendency is for there to be a decrease as a result of the traditional methods used in salt mining.