Portugal named ‘Economy of the Year’ by the Economist as foreign investment surges

Portugal has been named ‘economy of the year’ by the British business title The Economist, which analyses the performance of 36 of the world’s wealthiest nations.

The magazine’s assessment is based on five indicators: inflation, the deviation of inflation, GDP, employment, and unemployment.

It concludes that “in 2025, Portugal managed to combine strong GDP growth, low inflation and a booming stock market”.

Portugal Prime Minister Luís Montenegro said: “It is with hope and confidence that we see Portugal receiving exceptional international recognition.

“The distinction, naming Portugal’s economy as the ‘economy of the year’, is a fitting tribute to the merit and hard work of the Portuguese people and reinforces the government’s motivation to continue on the path that has brought us this far 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.

“In this way, we will provide greater well-being and a better future for the Portuguese people. Let’s do this, Portugal! Let’s do this, Portuguese people!”

Tourism and employment growth remain central to the country’s expansion, but the analysis also highlights the positive role of affluent foreign residents who continue to invest in and relocate to Portugal, attracted by comparatively favourable tax conditions.

Portugal’s Golden Visa residency-by-investment programme has played a crucial role in attracting international families, investors, and entrepreneurs.

According to a new report by the World Digital Foundation, the Golden Visa has contributed approximately €54 billion to the wider economy in Portugal.

With a minimum investment of €500,000 in an eligible alternative investment fund, Golden Visa holders gain freedom of movement across the 29 EU Schengen region countries and a clear pathway to permanent dual EU citizenship and a second passport after the qualifying residency period.

According to Paul Stannard, chairman and founder of Portugal Pathways and the Portugal Investment Owners Club, Portugal’s international recognition has been years in the making.

He explained: “Portugal has spent the last decade proving that it can pair lifestyle with economic resilience.

“The foundations laid by sustained foreign investment - much of it originally sparked by the Golden Visa - have helped accelerate Portugal into a new phase of global competitiveness.”

To find out more about the benefits of Portugal’s Golden Visa, arrange a free discovery call with Portugal Pathways’ expert team.

He adds that the country is increasingly attracting not only retirees or lifestyle migrants, but international entrepreneurs and corporate talent.

“What we’re seeing now is a wave of skilled professionals choosing Portugal as a base, not just because of tax benefits, but because the ecosystem is genuinely maturing,” he said.

“This recognition from The Economist is confirmation of a long-term trajectory rather than a one-year anomaly.”

Portugal’s triumph pushes neighbouring Spain - last year’s top performer - down to fourth place.

Ireland takes second position, followed by Israel. At the opposite end are smaller northern European economies. Estonia, Finland, and Slovakia rank lowest in this year’s compilation.

The United Kingdom, meanwhile, places a modest 27th, while the United States sits in 17th position.

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Disclaimer: The information on the Portugal Pathways and Portugal Investment Owners Club (P Club for short) websites and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Golden Visa investments need to be held for 6 to 7 years to allow for permanent citizenship/passport in the EU.

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