Portugal named the world’s top economy for 2025 by The Economist

Portugal begins 2025 with a major international distinction. British weekly The Economist has ranked the country as the best-performing economy in the world for 2025, among 36 mostly developed nations, based on a comparative analysis of key economic indicators.

In its annual global review, The Economist described Portugal’s performance as “sweet as a pastel de nata”, a metaphor reflecting the country’s balanced mix of growth, stability and resilience at a time of global economic uncertainty.

Strong performance across key indicators

The ranking is based on five main indicators: GDP growth, inflation, stock market performance, employment trends and overall economic balance.

Portugal stood out for its economic growth above the euro area average, controlled inflation, and a stock market that rose by more than 20% during the year, outperforming many advanced economies facing slower growth.

Tourism, investment and international confidence

According to The Economist, tourism continues to play a central role in supporting Portugal’s economy, alongside the country’s ability to attract foreign residents and international investment. These factors have reinforced confidence in Portugal as a competitive destination to live, invest and do business.

In the 2025 ranking, Portugal overtook Spain, last year’s leader, and ranked ahead of economies such as Ireland and Israel, highlighting a broader recovery trend among southern European countries.

A positive signal for the future

For The Economist, Portugal’s performance illustrates how economic stability, prudent policy choices and strong service sectors can deliver consistent results, even in a challenging global environment.

The full ranking of the world’s best-performing economies in 2025, including detailed methodology and country comparisons, is available in The Economist’s original analysis.