Unemployment hits record 15.3%

By ANA TAVARES – [email protected]

Portugal’s Prime Minister Pedro Passos Coelho announced that the country should be prepared to live with unusually high unemployment rates “for at least two or three years,” during a speech at the Social-Democrat Workers meeting on May Day in Lisbon.

But although the Prime Minister assured that the Government is implementing active employment measures, the figures released by Eurostat the following day seem to confirm his prediction – the unemployment rate in Portugal hit a new record high of 15.3% in March, three decimal points higher than in the previous month, becoming the third highest unemployment rate in the European Union (EU) behind only Greece and Spain. This means that around 800,000 people and 160,000 young people are currently unemployed.

According to the numbers released by the EU’s statistical office, the Portuguese unemployment rate has been soaring nonstop for at least a year and the period between February and March was no exception, as youth unemployment climbed from 35.4% to 36.1%.

The rate of unemployed men has also increased by four decimal points and now stands at 15.5%, while the unemployment rate among women is 15.1%.

Portugal’s unemployment rate soared compared to the Eurozone’s average rate of 10.9% in March – an increase of one decimal point against February’s figure – and the EU, which remained at 10.2%. These figures represent around 17.4 million and 24.8 million jobless people across Europe, respectively.

At the top of the EU countries with the highest unemployment rates remain Greece and Spain. The rate in Portugal’s neighbouring country increased by three tenths to 24.1% in March, and the latest Greek figures, which were released in January, indicate an unemployment rate of 21.7%.

However, Eurostat’s numbers are substantially higher than the quarterly figures released by the Portuguese National Statistics Institute (INE), which had predicted an unemployment rate of 14% between October and December 2011.

Although the figures of both Eurostat and INE are based on strict unemployment criteria, it is possible that Eurostat’s numbers may be revised according to the data released by the INE regarding the first three months of the year.

The entities’ figures differ because Eurostat bases its calculations on INE’s data, but also includes information provided by the Portuguese job centres, which are represented by the Employment and Professional Training Institute (IEFP). Further, the Eurostat numbers are released on a monthly basis, whilst the INE’s figures are revealed quarterly.

The situation would also be far worse if both entities were to include in their calculations the number of inactive people who have stopped looking for a job, as well as employees on reduced work schedules. If considered, these figures would make the Portuguese unemployment rate climb to over 18%, affecting over one million people, according to calculations based on INE’s latest figures.

Despite the gloomy outlook, the President of Portugal, Aníbal Cavaco Silva, said that he believes the unemployment rate will stop increasing in the second half of the year. “Based on the positive indicators I’ve been gathering throughout the country in terms of the innovation, the creativity and the willingness to export of our corporate fabric, there may be a possibility of inverting the trend in the second half of the year,” he told Público newspaper at the closing session of the Council for Globalisation in Cascais on May 4.

The President also said he was “very curious to know what the unemployment rate released by INE’s quarterly survey will be,” although he said he wasn’t expecting any major differences.