Portugal’s economy is experiencing notable growth, with a reported 1.9% increase in the third quarter of 2024, making it the third highest growth rate in the Eurozone. However, this positive economic performance is juxtaposed with significant social challenges, including a rising homelessness rate and persistent unemployment figures.
Key Data
- Portugal’s economy grew by 1.9% in Q3 2024, the third highest in the Eurozone.
- The unemployment rate remains stable at 6.4% as of September 2024.
- A concerning 23% increase in homelessness has been reported for 2023.
- Consumer inflation has risen to 2.3% in October 2024.
Economic Growth Amidst Challenges
According to Eurostat, Portugal’s economy grew by 1.9% in the third quarter of 2024, outperforming many of its Eurozone counterparts. This growth is part of a broader trend, as the Eurozone economy itself expanded by 0.4% during the same period. Notably, Germany and Ireland also showed signs of recovery, with Germany growing by 0.2% and Ireland rebounding from a previous contraction to achieve 2% growth.
Unemployment Rates Steady
Despite the economic growth, the unemployment rate in Portugal has remained unchanged at 6.4% as of September 2024. This figure is slightly lower than the same month last year, indicating a gradual improvement in the labor market. However, the number of unemployed individuals increased by 1.7% compared to the previous month, highlighting ongoing challenges in job creation.
Rising Homelessness
In a troubling development, the Minister of Labour, Solidarity, and Social Security, Maria do Rosário Ramalho, announced a 23% increase in homelessness in Portugal, with the number of homeless individuals reaching 13,128 in 2023. This rise is attributed to various socio-economic factors, and the government is prioritizing measures to address this issue in the upcoming state budget.
Inflation Concerns
Consumer inflation in Portugal has also seen an uptick, reaching 2.3% in October 2024, up from 2.1% in September. This increase is primarily driven by rising prices in unprocessed food and energy sectors. The core inflation index, which excludes volatile items, stands at 2.6%, indicating persistent inflationary pressures in the economy.
Government Response
In response to these challenges, the Portuguese government is focusing on social welfare initiatives, particularly for vulnerable populations. The budget for 2025 aims to reverse the trajectory of poverty and homelessness, with significant allocations for updating pensions and social benefits. The government plans to enhance the Solidarity Supplement for the Elderly and implement strategies to address homelessness and support children and individuals with disabilities.
Conclusion
While Portugal’s economy shows promising growth, the rising rates of homelessness and inflation present significant challenges. The government’s commitment to addressing these social issues will be crucial in ensuring that economic growth translates into improved living conditions for all citizens. As Portugal navigates these complexities, the balance between economic performance and social welfare will be a key focus for policymakers moving forward.
