Eurozone's new star: Portugal crowned 2025 'economy of the year'

Portugal has quietly turned into the eurozone’s star performer, topping The Economist's 2025 ranking of global economies.

It earned this distinction based on inflation, gross domestic product, jobs, and market data from the world’s 36 richest countries.

The southwestern European economy was described as being "as sweet as a pastel de nata", a reference to the staple Portuguese custard-based pastry.

"Portuguese investors have done well, too, with the stockmarket rising by more than 20% in 2025," the ranking highlighted.

Portugal was followed by Ireland and Israel. Spain, last year’s winner, now shares fourth place with Colombia, followed by the Czech Republic and Greece — underscoring a broader trend of accelerating growth in southern Europe.

"Other members of the eurozone that faced difficulties in the 2010s, including Greece (our winner in 2022 and 2023) and Spain, are also among the frontrunners," reads the article.

Central and Eastern European countries such as Slovakia, Finland, and Estonia are at the bottom of the ranking.

On social media, Prime Minister Luís Montenegro said the ranking "reinforces the government's motivation to continue on the path that has brought us here 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," the Portuguese Prime Minister added.

Government forecasts point to economic growth of 2% this year and 2.3% next year.

Despite the good news, the country faces dissatisfaction around housing costs, as well as labour and employment, with a general strike called on 11 December.

The Order of Economists estimates that the general strike could cost the Portuguese economy between €600-700 million, in a scenario where half of the workers join the strike. That's according to figures quotedby SIC Notícias.