Portugal Named “Economy of the Year” 2025

• 24 December, 25

The authoritative British magazine The Economist has announced that Portugal has been named “Economy of the Year” 2025, ranking first among the world’s 36 wealthiest countries and successfully surpassing last year’s champion, Spain.

This marks the fifth consecutive year that The Economist has conducted a comprehensive ranking of economic performance among 36 high-income countries, selecting the economy with the most outstanding overall performance of the year.

Evaluation Based on Five Core Indicators

This economic ranking evaluates overall national performance based on five core indicators, including inflation rates, inflation deviation, GDP growth, employment conditions, and stock market performance. According to The Economist, Portugal demonstrated strong and stable economic fundamentals in 2025, achieving solid GDP growth while maintaining low inflation and a consistently strong stock market. With balanced and outstanding results across multiple key economic indicators, Portugal emerged as one of the top-performing economies in Europe in 2025.

Tourism and Foreign Residents Drive Growth

According to the report, tourism has been one of the core drivers of Portugal’s GDP and employment growth.

At the same time, a large number of high-net-worth foreign individuals have relocated to Portugal to benefit from relatively favorable tax policies, further stimulating consumption as well as growth in real estate and the services sector.

Ranking Overview

In the latest ranking, economic performance varied significantly among countries. Portugal secured first place thanks to its strong overall performance, followed by Ireland in second place, while Israel ranked third with equally impressive results. Notably, Spain, which topped the ranking last year, recorded the same overall score as Colombia in 2025 and was unable to maintain its leading position. Meanwhile, the lower end of the list was dominated by Nordic and Central and Eastern European countries, with Estonia, Finland, and Slovakia ranking near the bottom and facing relatively greater economic pressure.

Prime Minister’s Response: A Result of Collective Effort

Portuguese Prime Minister Luís Montenegro stated on the social media platform X: “The Economist naming Portugal as the ‘Economy of the Year’ is a fair recognition of the hard work and dedication of the Portuguese people, and it further strengthens the government’s determination to continue advancing reforms.”

He emphasized that the Portuguese government will continue to pursue bold and pragmatic reforms aimed at enhancing national competitiveness and productivity, with a strong focus on creating more jobs, raising wage levels, and further strengthening the welfare state. He noted that this approach is fundamental to improving quality of life and building a better future for the people of Portugal.

Economic Growth Outlook Remains Optimistic

According to the latest economic forecasts released by the Portuguese government, Portugal’s economic growth outlook remains optimistic. Data show that the country’s GDP growth rate is expected to reach 2% in 2025, with further expansion to 2.3% in 2026. Supported by well-controlled inflation, a stable labor market, and continued inflows of international investment, Portugal’s economy is widely regarded as well-positioned for sustainable and long-term growth.

Portugal’s recognition as The Economist’s “Economy of the Year” 2025 not only reflects its success in macroeconomic management but also reinforces its attractiveness as a destination for investment, residence, and business in Europe. Against a backdrop of ongoing global economic uncertainty, Portugal’s performance stands out as particularly impressive.

Cre: The Portugal News