Portugal must boost productivity and reform labor laws to sustain growth

New demographic estimates show Portugal's resident population rising to 11.4 million, an 8 % increase between 2021 and 2025. While the growth expands the internal market and labour pool, officials warn it will not automatically raise wages, improve skills or fund public services.

Experts stress that sustained prosperity requires higher productivity, greater investment in technology and skills, and a more modern, flexible labour market. They call for reforms to simplify hiring, reduce bureaucratic burdens, and align labour legislation with current economic demands, without weakening workers' protections. Enhancing qualification and reskilling programmes is also deemed essential as digitalisation, automation and artificial intelligence reshape work.

Without these changes, Portugal risks remaining below the productivity levels of its European peers, limiting its ability to attract investment, improve public services and retain young talent.