Portugal’s labour market is showing signs of robust recovery as the unemployment rate fell to 6.2% in January 2025, down from 6.4% in December 2024. Provisional data from Statistics Portugal indicate that the rate has been steadily decreasing since November of last year. Notably, the employed population now stands at 5.167 million its highest level since February 1998.
While the overall jobless rate improved, some disparities persist: the unemployment rate for women remains slightly higher at 6.5% compared to 6% for men. Youth unemployment for those aged 16-24 also saw a modest decline, dropping to 19.5% from 20.4% in December, though this remains a critical focus for policymakers.
Government initiatives have played a pivotal role in this positive trend. A new migrant employment support programme, introduced last October, along with efforts to expedite the work visa process aiming for permit issuance within 30 days has helped attract foreign workers to fill key vacancies. Additionally, proposed tax breaks for individuals under 35 are expected to further stimulate job growth and ease skills shortages.
Economic performance in Portugal has also been a bright spot in the eurozone. The country’s GDP grew by 2.8% year-on-year in the last quarter of 2024, supported by strong consumer spending and investment. Analysts from Oxford Economics predict that Portugal, alongside Spain, will continue to outperform other major economies in the region throughout 2025.
As these favourable trends persist, Portugal’s labour market appears well-positioned for continued growth, reinforcing the nation’s reputation as one of the eurozone’s most promising and resilient economies.
