Portugal: EU more optimist than government on unemployment

The European Commission forecasts that the unemployment rate in Portugal will fall to 5.7% this year, from 6.6% in 2021, and to 5.5% in 2023, according to the spring macroeconomic forecasts released on Monday.

The estimate from Brussels is more optimistic than that of the ministry of finance, which in the report underlying the draft ​​​​budget forecasted an unemployment rate of 6% this year.  

The Brussels statisticians point out that the unemployment rate fell to 6.6% in 2021, supported by employment support measures and the economic recovery, improving further to 5.6% in February 2022, reaching the lowest in 20 years.

They also pointed out that the employment rate reached an all-time high in late 2021 and early 2022, even though hours worked remained below the pre-pandemic level.

However, it considers that as the pandemic employment support measures end in the second quarter of this year, the unemployment rate should improve at a much slower pace over the forecast horizon.

The European Commission said the recovery in foreign tourism is likely to have a greater impact on hours worked than on employment.