The Economist elects Portugal ‘The Economy of the Year’
The UK magazine The Economist has distinguished Portugal as the ‘Economy of the Year’ in 2025.
It was chosen after an in-depth a analysis of five fundamental indicators – inflation, inflation deviation, GDP, employment, and stock market performance – where Portugal stands out for combining robust economic growth, low inflation and a bullish capital market.
According to the publication, “in 2025, Portugal managed to combine strong GDP growth, low inflation and a rising stock market”. Among the factors that boosted economic performance, The Economist highlights a dynamic tourism market and the growing attraction of foreign residents, in a context of fiscal competitiveness.
In this year’s ranking, Portugal succeeds Spain, winner of 2024, which now drops to fourth place. Ireland and Israel occupy the second and third positions, respectively.
At the opposite end of the spectrum, the economies of Estonia, Finland and Slovakia are among the most penalised in the set of indicators evaluated. In a post on the X network, Prime Minister Luís Montenegro stressed that this distinction is “a fair acclamation of the merit and work of the Portuguese people” and reinforces “the Government’s motivation to follow the course that has brought us here in recent months”.
The Prime Minister also added that “it is by reforming with courage and making the country more competitive and productive that we will continue to create jobs, increase wages and strengthen the welfare state”. The Government’s forecasts point to a growth of the Portuguese economy of 2% in 2025 and 2.3% in 2026.
