Image Credentials: Image Title: 🇵🇹 Sweet as a Pastel de Nata: Portugal Crowned “Economy of the Year” by The Economist Source: (sora.openai) Date: November 2025. Attribution: This image was created using AI-generated imagery (sora.openai) and does not depict a real-world scene.
By Open Chronicle Staff with Agencies
LISBON, PORTUGAL – Portugal has been named the top-performing economy of 2025, according to the annual ranking published by the British magazine, The Economist. The publication described Portugal’s economic performance over the past year as “Sweet as a pastel de nata,” placing it at the head of a list of 36 developed countries.
The decisive factors contributing to Portugal’s leadership in the ranking include strong GDP growth, which significantly surpassed the European average; inflation kept firmly under control; and a robust performance by the nation’s stock market.
Government forecasts support this optimism, projecting economic growth of 2% this year and 2.3% in the coming year.
Key Drivers of Success
The Economist highlighted several key drivers behind Portugal’s success. The tourism sector was noted as one of the country’s most significant economic engines.
Crucially, the country’s capacity to attract wealthy foreigners was also highlighted, particularly those drawn by low tax rates and possessing the financial means to invest.
Portugal’s ascendancy sees it dethrone last year’s leader, Spain, which fell to fifth position in the 2025 ranking. The silver medal for the “sweetest” economies went to Ireland, followed by Israel and Colombia.
The Economist compiled its comprehensive list by analyzing data across five key economic indicators: inflation, deviation from inflation, Gross Domestic Product (GDP), employment, and stock market performance.
On the other end of the spectrum, the worst-performing economies were predominantly located in Northern Europe, with Estonia, Finland, and Slovakia occupying the lowest positions in the compilation.
Government Reaction
É com esperança e confiança que vemos um reconhecimento internacional excepcional de Portugal. A distinção pela revista “The Economist” de que a “economia do ano” foi a portuguesa é uma justa aclamação do mérito e do trabalho dos portugueses e reforça a motivação do Governo em…
— Luís Montenegro (@LMontenegro_PT) December 7, 2025
Portuguese Prime Minister Luís Montenegro welcomed the news, describing the recognition as a “just acclamation of the merit and hard work of the Portuguese people.”
Writing on the social media platform X, the Prime Minister stated that the distinction “reinforces the Government’s motivation to follow the path that has brought us here in recent months.”
Montenegro emphasized a commitment to future reforms: “It is by reforming with courage and making the country more competitive and productive that we will continue to create employment, increase salaries, and strengthen the welfare state. This way, we will provide more well-being and a greater future for the Portuguese.”