Portugal has been named “Economy of the Year 2025” by The Economist, reaffirming its position as one of the fastest-growing economies in Europe. According to the publication, Portugal now leads the ranking of the world’s 36 richest economies, followed by Ireland in second place and Israel in third.

The distinction is based on a combination of factors: solid economic growth, low inflation, a dynamic labour market and a positively performing stock market, conditions that place Portugal at the forefront of advanced economies.

Celebrating the result, the Portuguese Prime Minister, Luís Montenegro, published a post on X stating that this distinction “is a fair acknowledgement of the merit and work of the Portuguese and reinforces the Government’s motivation to continue the path that has brought us here in recent months.”

What is the “Economy of the Year 2025” Ranking?

Each year, The Economist releases a ranking of the world’s 36 richest economies. In 2024, Spain occupied the top position but has fallen to fourth place this year.

The magazine uses five key economic indicators to produce the “Economy of the Year” ranking, measuring countries’ performance in: inflation, the deviation of inflation, GDP, employment, and unemployment.

Portugal’s selection for 2025 stems from a mix of strong GDP growth, low inflation and an optimistic stock market, as noted in The Economist’s analysis. The article also highlights tourism and employment as central drivers of Portugal’s robust GDP, “at a time when many wealthy foreigners are moving to the country to take advantage of low tax rates.”

Northern European countries appear at the bottom of this year’s ranking, surprising many in the international press. Typically associated with high quality-of-life indices, Estonia, Finland and Slovakia are among the lowest performers in this assessment. The United Kingdom stands in 27th place, while the United States ranks 17th.

Capitalising on Portugal’s Growth with HP Invest

With Portugal now recognised by The Economist as the leading economy for 2025, the country presents a particularly favourable landscape for strategic investment. Based in Lisbon, Portugal, HP Invest is exceptionally well placed to guide investors through this moment, offering a curated selection of high-return, low-risk opportunities across key sectors. From Hospitality to Real Estate investments, our specialists are available to provide tailored guidance and outline the projects best suited to your objectives. To explore these opportunities in greater detail, we invite you to contact our team.