Portugal's Growth Continues to Outperform the UK and Eurozone

Portugal’s economic resilience and strong property market performance continue to set it apart as one of Europe’s most attractive destinations for investment and relocation.

Key economic indicators reveal that Portugal is poised to outperform not just the Eurozone but also other leading markets like the UK over the coming years.

Surpassing the Eurozone and the UK

According to the European Commission, Portugal’s GDP growth is forecast to rise from 2.0% in 2024 to 2.3% in 2025, significantly higher than the Eurozone’s projected growth of 0.8% and 1.3% over the same period.

Comparatively, the UK’s growth predictions stand at 1.0% for 2024 and 1.2% for 2025, underscoring Portugal’s stronger economic trajectory.

Portugal’s inflation rate is also set to improve, decreasing from 2.3% in 2024 to 1.9% in 2025, compared to the Eurozone’s 2.5% dropping to 2.2% and the UK’s 2.6% falling to 2.2%.

This lower inflation environment reflects Portugal's adept handling of economic challenges, enhancing its appeal to investors and expats alike.

Investment Opportunities

Portugal’s property market continues to shine, particularly in the luxury segment. Recent data highlights a robust 5.8% growth forecast for 2025, outperforming the broader EU/UK property markets, which are expected to decline by 2.5% during the same period.

High-demand regions like Central Algarve and Lisbon have seen capital growth of 10.9% and 9.1%, respectively, in the last 12 months, illustrating the growing value of Portuguese real estate.

Meanwhile, the UK and EU property markets face stagnation, further amplifying Portugal’s attractiveness for high-net-worth individuals (HNWIs) seeking secure and lucrative investment opportunities.

The Golden Visa and Evolving Tax Incentives

Portugal’s Golden Visa programme continues to attract HNWIs globally, offering residency-by-investment through qualifying funds, alongside benefits like Schengen travel freedom and a path to citizenship after five years. Alternative investment funds have become the most popular route to Golden Visa acquisition, with a minimum investment threshold of €500,000 in a qualifying government approved fund or fund-of-funds.

The anticipated shift to the new NHR 2.0 tax regime in March 2025 is also drawing attention. This scheme is designed to attract highly skilled professionals and young entrepreneurs, offering competitive tax incentives.

Key highlights include a 0% tax rate on most foreign-sourced income and a 20% flat rate for high-added-value activities, ensuring Portugal remains a hub for global talent and innovation.

Confidence in Portugal's Future

Investor confidence in Portugal is at an all-time high, with 84% of entrepreneurs surveyed by Ernst & Young (EY) planning to expand or establish operations in the country, compared to 72% for the Eurozone and 69% for the UK.

The survey also revealed that 77% of global executives expect Portugal’s investment attractiveness to improve over the next three years, surpassing expectations for the broader Eurozone at just 67% and 59% for the UK.

Paul Stannard, Chairman of Portugal Pathways, noted: “Portugal is uniquely positioned as a safe and stable investment destination with an unrivalled lifestyle offering. For HNWIs, the combination of economic stability, tax incentives, and luxury property market growth is a compelling proposition.”

The Portugal Advantage

While much of Europe faces economic uncertainty, Portugal’s strong growth prospects, favourable property market dynamics, and investor-friendly policies solidify its reputation as a haven for stability and opportunity.

Whether through the Golden Visa programme, the NHR 2.0 regime, or the thriving property market, Portugal continues to pave the way as the premier destination for investors and expatriates.

For further insights into Portugal’s residency and investment opportunities, explore Portugal Pathways’ Golden Visa Investment Fund Index.

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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.

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