Portuguese unemployment falls as remote work rises
Portuguese unemployment has continued to decline in early 2025, coinciding with a significant surge in remote work, according to new labor data released by the National Statistics Institute (INE), as reported by ECO News on May 7, 2025.
As the country embraces new digital work norms, nearly 1.1 million Portuguese professionals are now working remotely, an increase of 0.4% from the last quarter, and 1.7% compared to the first quarter of the same year.
Portuguese Unemployment Drops to 6.6%
The official unemployment rate in Portugal stood at 6.6% at the beginning of 2025, reflecting a 2.4% increase in employment year-on-year. That’s a 0.6% increase compared to the previous quarter, and equates to 366,000 unemployed individuals, a quarterly decrease of 2,500 people, and a drop of 3,800 compared to the same period the previous year.
Analysts suggest this positive movement is closely linked to the rapid normalization of flexible work models.
Despite the fall in unemployment, labor underutilization (the combined total of unemployed, underemployed, and discouraged workers) remained unchanged at 11.1%. This metric suggests that while unemployment is shrinking, not all roles are meeting workers’ needs in terms of hours or income.
Remote Work Trends
A key highlight of the latest labor report is the rising number of remote workers. As of the end of March, 1.083 million people, 20.9% of Portugal’s employed population, were working from home.
Employers report that remote arrangements have improved employee retention, reduced office costs, and opened new recruitment pipelines in rural areas. For employees, remote work can offer a better work-life balance compared to traditional working models.
The number of people aged 16 and older who are not actively participating in the workforce rose to 3.75 million, marking a quarterly increase of 13,500 and a year-on-year rise of nearly 17,000.
While part of this shift is demographic, Portugal’s population is aging. Remote work is expected to play a future role in reversing this trend by offering part-time, flexible arrangements suited for older adults, caregivers, and students looking to engage in employment on non-traditional terms.
Policymakers and businesses alike must ensure that the benefits of this digital shift are equitably distributed and that no one is left behind in Portugal’s remote-first future.
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