Portugal leads The Economist’s global ranking in 2025, supported by growth above the European average, controlled inflation and significant gains in the stock market. “Sweet as a custard tart”. 

This year, Portugal appears in the first position, dethroning Spain, last year´s winner.

“In 2025, (Portugal) managed to combine strong GDP growth, low inflation and a rising stock market”, the magazine writes.

Portugal was highlighted by The Economist magazine as the best performing economy in 2025 among 36 mostly developed countries. The British weekly’s annual ranking places the country in first place due to the combination of GDP growth above the European average, controlled inflation and the appreciation of the Portuguese stock market throughout the year. 

An economy “sweet as a pastel de nata”. The study assesses five core indicators of inflation, the extent of inflation, economic growth, employment developments and stock market performance. 

In the British magazine’s summary, Portugal stood out for “strong GDP growth, low inflation and a dynamic stock market”, factors that, together, pushed the country to the top of the table that last year had been led by neighboring Spain. 

According to The Economist, tourism continued to be one of the main drivers of the Portuguese economy, while the arrival of foreign residents with greater financial capacity fueled demand and investment. These elements contributed to economic growth significantly above the euro area average. 

The magazine also highlights the good performance of the Portuguese stock market, which appreciated more than 20% in 2025, placing Portugal among the stock markets with the best global performance. 

On the international scene, the positive highlight also falls on countries such as Ireland, Israel, Greece and Spain, which occupy top positions in the ranking. 

At the opposite end are mainly Northern European economies, such as Estonia, Finland and Slovakia, penalized by persistent inflation or weak economic dynamics. 

The United States appears only in the middle of the table due to still high inflation despite a resilient labor market. 

The magazine notes that inflation remains above 2% in much of the OECD area, although Portugal has distinguished itself by its ability to keep prices under control in a year of geopolitical instability and budgetary pressures.

In a publication on the X network, the Prime Minister, Luís Montenegro, stated that “the distinction by ‘The Economist’ magazine that the ‘economy of the year’ was the Portuguese is a fair acclamation of the merit and work of the Portuguese and reinforces the Government’s motivation to follow the path that has brought us here in recent months”.

The Portuguese Government estimates a GDP growth of 2% in 2025 and forecasts a 2.3% growth in 2026.

this list, the magazine compiled data from five economic indicators — inflation, inflation deviation, gross domestic product (GDP), employment and stock market performance.

“In 2025, [Portugal] managed to combine strong GDP growth, low inflation and a rising stock market,” the magazine writes.

Driving GDP and employment in Portugal, according to “The Economist”, is tourism, at a time when “many wealthy foreigners are moving to the country to take advantage of low tax rates”.

In second place in this ranking is Ireland, followed by Israel.

In the worst positions, economies further north in Europe appear: Estonia, Finland and Slovakia are the last in this compilation of indicators.

Distinction “is a fair acclamation of the merit and work of the Portuguese”, highlights Montenegro

In a publication on the X network, the Prime Minister, Luís Montenegro, stated that “the distinction by ‘The Economist’ magazine that the ‘economy of the year’ was the Portuguese is a fair acclamation of the merit and work of the Portuguese and reinforces the Government’s motivation to follow the path that has brought us here in recent months”.

“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. This way we will give more well-being and more future to the Portuguese”, wrote the Prime Minister.

The Government’s forecasts point to economic growth of 2% this year and 2.3% next year.