page_title: Economic history of Portugal
section_title: Decline: 17th to 19th century
hierarchical_section_title: Economic history of Portugal / Kingdom of Portugal / Decline: 17th to 19th century
context_page_description: The economic history of Portugal covers the development of the economy throughout the course of Portuguese history. It has its roots prior to nationality, when Roman occupation developed a thriving economy in Hispania, in the provinces of Lusitania and Gallaecia, as producers and exporters to the Roman Empire. This continued under the Visigoths and then Al-Andalus Moorish rule, until the Kingdom of Portugal was established in 1139.
  With the end of Portuguese reconquista and integration in the European Middle Age economy, the Portuguese were at the forefront of maritime exploration of the age of discovery, expanding to become the first global empire. Portugal then became the world's main economic power during the Renaissance, introducing most of Africa and the East to European society, and establishing a multi-continental trading system extending from Japan to Brazil.
  In 1822, Portugal lost its main colony, Brazil. The transition from absolutism to a parliamentary monarchy involved a devastating Civil War from 1828-34.
context_section_description: During the 15th and 16th centuries, with its global empire that included possessions in Africa, Asia, South America, and Oceania, Portugal remained one of the world's major economic, political, and cultural powers. English, Dutch, and French interests in and around Portugal's well-established overseas possessions and trading outposts tested Portuguese commercial and colonizing hegemony in Asia, Africa, and the New World. In the 17th century, the lengthy Portuguese Restoration War (1640–1668) between Portugal and Spain ended the sixty-year period of the Iberian Union (1580–1640). According to a 2016 study, Portugal's colonial trade "had a substantial and increasingly positive impact on [Portugal's] economic growth". Despite its vast colonial possessions, Portugal's economy declined relative to other advanced European economies from the 17th century and onward, which the study attributes to the domestic conditions of the Portuguese economy.
  The 1755 Lisbon earthquake and, in the 19th century, armed conflicts with French and Spanish invading forces first in the War of the Oranges in 1801, and from 1807 in the Peninsular War, as well as the loss of its largest territorial possession abroad, Brazil, disrupted political stability and potential economic growth. The Scramble for Africa during the 19th century pressed the country to divert larger investments into the continent to secure its interests there.
  By the late 19th century, the country's resources were exhausted by its overstretched empire, which was now facing unprecedented competition. Portugal had one of the highest illiteracy rates in Western Europe, a lack of industrialization, and underdeveloped transportation systems. The Industrial Revolution, which had spread out across several other European countries, creating more advanced and wealthier societies, was almost forgotten in Portugal. Under the rule of Carlos I, the penultimate King of Portugal, the country was twice declared bankrupt—on 14 June 1892, and 10 May 1902—causing socio-economic disturbances, socialist and republican antagonism, and press criticism of the monarchy. However, it was during this period that the predecessor of the Lisbon Stock Exchange was created in 1769 as the Assembleia dos Homens de Negócio in Praça do Comércio Square, in Lisbon's city center. In 1891, the Bolsa de Valores do Porto (Porto Stock Exchange) in Porto was founded. The Portuguese colonies in Africa started a period of great economic development fuelled by ambitious Chartered Companies and a new wave of colonization.
caption: Sebastião José de Carvalho e Melo, Marquis of Pombal, "The Expulsion of the Jesuits" by Louis-Michel van Loo and Claude-Joseph Vernet, 1766.
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