Portugal’s labour market showed further signs of resilience in 2025, with new data pointing to higher employment levels and the lowest labour underutilisation rate in more than a decade.
The positive figures come after Portugal was recently named Economy of the Year by The Economist, a sign of increasing international confidence in the country’s economic trajectory.
Statistics from the National Statistics Institute (INE) reveal that the labour underutilisation rate dropped to 10.2% in 2025. This represents a decline of 0.8 percentage points compared with the previous year.
It is the lowest reading in 14 years, highlighting stronger job creation and a reduction in unused labour capacity.
Employment numbers also rose markedly during the year. The average annual employed population reached 5,275,300 in 2025, an increase of 3.2% on 2024, equivalent to roughly 163,000 additional workers.
Meanwhile, unemployment continued to edge down. The number of unemployed people was estimated at 337,100, a fall of 4%, or around 14,000 individuals, compared with the year before.
Young people also experienced improved conditions in the labour market. The youth unemployment rate, which covers those aged between 16 and 24, dropped to 19.5% in 2025, down 2.1 percentage points year on year.
Paul Stannard, Chairman and Founder of Portugal Pathways and the Portugal Investment Owners Club, said: “Portugal’s economy continues to go from strength to strength.
“Recognition from The Economist as the Economy of the Year in 2025 shows just how far Portugal has come in the past decade or so.
“We’ve never seen so much interest in Portugal from international investors and families. Where high-net-worth individuals go, money naturally follows, so it bodes well for the future and we expect to see this growth continue.”
About Portugal Investment Owners Club
The Portugal Investment Owners Club, or P Club for short, is a unique investor membership community designed for discerning individuals, families, and organisations committed to exploring and capitalising on life in Portugal and enjoying money-can't-buy experiences and exclusive events.
About Portugal Pathways
Portugal Pathways has supported hundreds of Golden Visa residency-by-investment applications and provides expert guidance through its professional supply chain network on estate planning, wealth management, Golden Visa and tax optimisation, including post-NHR / IFICI tax regime planning, as well as private healthcare, money transfers and bespoke relocation and luxury real estate solutions to enhance life and investment in Portugal
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