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Portugal has received a significant international honour after The Economist named it the Economy of the Year for 2025. This recognition places Portugal at the top of a ranking of the world’s 36 wealthiest economies and reinforces the country’s growing reputation as one of Europe’s most dynamic and resilient destinations for both lifestyle and investment.
The British magazine’s annual review, titled “Which economy did best in 2025?”, highlighted Portugal’s strong blend of macroeconomic indicators. These include healthy GDP growth, controlled inflation around 2.3 percent, rising employment, steady private consumption, and a positively performing stock market. At a time when many advanced economies remain under pressure, Portugal’s balanced performance stood out as a model of stability and adaptability.
Prime Minister Luís Montenegro welcomed the recognition as a clear reflection of the hard work and perseverance of the Portuguese population. He stated that this distinction strengthens the government’s determination to continue reforms that drive competitiveness, productivity, and improved social welfare.
Economy Minister Manuel Castro Almeida described the accolade as very good news for the country, while maintaining a realistic view that not all citizens are yet experiencing the full benefits of the rebound. He noted that Portugal has moved from very poor to a little less poor, acknowledging the importance of ensuring rising wages, stronger purchasing power, and improved public services.
The response across society has been mixed. While many see the ranking as confirmation of Portugal’s forward momentum, others highlight the continuing challenges of housing affordability, access to essential goods, and the strain on public systems. Critics argue that for the accolade to carry true meaning, the benefits must be felt broadly across households, workers, and small businesses, not only reflected in market indicators or foreign capital inflows.
Beyond the economic data, Portugal’s lifestyle offering continues to be one of the strongest drivers of international attention. The country has become a preferred destination for those seeking a high quality of life with a lower cost base than most Western European capitals.
Portugal offers a Mediterranean climate, excellent healthcare, renowned safety levels, diverse natural landscapes, high English proficiency, and a thriving cultural scene. Cities like Lisbon, Porto, Braga, Aveiro, and Coimbra attract international professionals and digital nomads, while the Algarve, Silver Coast, and Madeira draw lifestyle buyers, retirees, and long term investors.
Quality of life has always been one of Portugal’s most powerful selling points. Combined with recent economic performance, it strengthens the country’s position as a destination where stability, beauty, and opportunity meet.
For property investors and global buyers, Portugal’s recognition as Economy of the Year reinforces confidence in the country’s long term fundamentals. The real estate market remains one of Europe’s most interesting environments, supported by:
• Consistent capital growth over the past decade
• Strong rental demand in Lisbon, Porto, and the Algarve
• Expanding technology and tourism sectors
• High levels of foreign buyer activity
• Growing interest in branded residences, resort communities, and long stay living models
• Continued infrastructure investment across transport, healthcare, and education
Analysts note that while prices have risen in key areas, Portugal still offers strong value relative to many Western European markets. For investors focusing on lifestyle combined with long term appreciation, Portugal’s stability, demand from international residents, and ongoing urban regeneration projects create a compelling case.
At the same time, international companies continue to expand their presence in Portugal. Technology hubs in Lisbon and Porto, manufacturing clusters in the north, and hospitality demand across the Algarve and Atlantic islands all contribute to diversified economic momentum.
Experts caution that while Portugal’s progress is real, long term resilience depends on addressing structural issues. These include enhancing productivity, improving wage growth, ensuring housing accessibility, and diversifying beyond tourism. Maintaining social cohesion and ensuring the benefits of growth reach the wider population will be essential for sustaining the country’s positive trajectory.
Portugal’s recognition by The Economist serves as both a milestone and a reminder. The country has reached a new level of international visibility, but its future success will depend on continued investment in people, innovation, and quality of life.
For residents, expatriates, and investors, the message is clear. Portugal is entering a new phase marked by confidence, credibility, and renewed global interest. The combination of economic strength and lifestyle appeal is positioning the country as a standout destination for those seeking stable long term growth in an increasingly uncertain world.
Portugal’s status as Economy of the Year highlights its potential not only as a place to visit or retire, but also as a hub for entrepreneurship, investment, and modern living.
Elly Herriman
Director of Marketing and Innovation
📧 elly@internationalpropertyalerts.com
🌐 www.internationalpropertyalerts.com
📱 WhatsApp: +44 7796 174253
About International Property Alerts
International Property Alerts is a premier global platform connecting real estate investors with handpicked opportunities in emerging and lifestyle-driven markets. Through curated listings, expert guidance, and market insights, we help buyers make confident property decisions worldwide.
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