Portugal’s labour market continued to strengthen in 2025, with new figures showing rising employment and one of the lowest levels of labour underutilisation in more than a decade.
The data comes as the country was recently named Economy of the Year by The Economist, reflecting growing international confidence in Portugal’s economic performance.
According to the National Statistics Institute (INE), the labour underutilisation rate fell to 10.2% in 2025, a drop of 0.8 percentage points compared with the previous year.
This marks the lowest level recorded in 14 years, signalling improved job availability and reduced slack in the labour market.
Employment also increased significantly over the year. The average annual employed population reached 5,275,300 people in 2025, representing a rise of 3.2%, or around 163,000 additional workers, compared with 2024.
At the same time, the number of unemployed people declined. The unemployed population was estimated at 337,100, a decrease of 4%, or about 14,000 individuals, relative to the previous year.
Younger workers also saw improved prospects. The youth unemployment rate, covering those aged 16 to 24, fell to 19.5% in 2025, down 2.1 percentage points from 2024.
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.”
To find out how you can invest in Portugal’s growing economy, contact Portugal Pathways today.
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Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.
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