Bank of Portugal Reports Record €5.3 Billion in New Consumer Credit Through July
The Bank of Portugal released new data this Monday revealing that the amount of new consumer credit granted by banks and financial institutions reached a record €5.3 billion between January and July of this year. This figure represents a 9% increase when compared to the equivalent period in the previous year, indicating a significant acceleration in consumer lending activities across the nation. The central bank's report highlights that this growth was observed across all segments of the consumer credit market.
A detailed analysis of the data shows a particular emphasis on loans designated for vehicle purchases as well as for home-related purposes and renovations. The category of automobile credit saw new operations total €2.1 billion during the first seven months of the year, a year-over-year increase of nearly 12%. Within this amount, the financing for the purchase of used vehicles by families accounted for over €1.5 billion, demonstrating a strong demand in the secondary car market.
Personal credit, which traditionally constitutes the largest portion of the consumer credit portfolio, also registered robust growth. Consumers took on €2.38 billion in new personal loans through July, an increase of 9.9%. A significant part of this segment, categorized as credit for home, renovations, and other purposes, grew by 9.6%, amounting to €2.3 billion. This specific increase points to a heightened level of investment by individuals in their properties, a key indicator of domestic economic activity and confidence in the housing sector.
The data also shows a more modest rise in credit extended through credit cards, lines of credit, and overdraft facilities. This category saw a 1% increase, reaching a total of €830 million. The overall trend has been one of consistent expansion, with the market now marking 16 consecutive months of growth. The last recorded contraction occurred in March of 2024, according to the Bank of Portugal's historical data.
Looking at the monthly figures, July 2025 set an all-time record for new consumer credit, with €826 million granted in that month alone. This represents an 11% rise compared to July of the previous year. The monthly breakdown for July shows that both personal credit and automobile credit experienced growth rates of 12%, while the volume of new credit card debt increased by 8%.
Economists are interpreting these figures as a sign of resilient domestic demand and consumer confidence, despite a complex macroeconomic environment. The strong performance in credit for home renovations is particularly noteworthy, as it suggests that property owners are actively investing in the maintenance and improvement of the national housing stock. This trend has direct implications for the construction and real estate services industries, providing a stable source of domestic demand that complements activity from international investors.
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