Economist magazine, one of the global references in the economic and financial area, considered Portugal as “Economy of the Year” in 2025, a distinction that positioned our country as the one that created the most conditions this year, within the 36 richest economies in the world based on key macroeconomic indicators. This turned out to be a distinction that, when added to some other recent developments – budget surplus above that predicted by the government, significant reduction in public debt and consistent increase in average net income (above 5%) – and opens up a cycle of opportunities that can be very favorable for the country. And that can be further improved if some important reforms for the country’s productivity and competitiveness materialize.
The confidence that this recognition brings can bring significant opportunities for Portugal in the short and medium term. Firstly, because international recognition tends to reinforce investor confidence, potentially increasing direct foreign capital flows, favoring new businesses, innovation and employment. Then, it is important to say that it can help boost the tourism sector, real estate demand and the interest of expatriates and qualified professionals, strengthening related markets, which are important for the country’s economy. Thirdly, because standing out as one of the best performing economies can open doors to international economic cooperation, strengthen Portugal’s position in the European Union and help attract global talent — factors that, together, can support more resilient economic growth in the future.
It is true that much remains to be done. Despite international recognition, Portugal continues to face structural economic challenges that could limit its long-term growth potential. Among them, low productivity stands out, a chronic problem that results from insufficient levels of innovation, technological investment and qualification in some sectors.
Another problem that requires attention in the medium term is related to the demographic winter. The country continues to age rapidly and faces difficulties in attracting and retaining young, qualified labor, which puts pressure on both the pension system and the availability of talent for companies. Furthermore, the high public debt, although more controlled than in the past, is still very high and limits the fiscal room for maneuver and above all makes the country vulnerable to external shocks or rising interest rates.
Finally, the geopolitical plan is a condition that, being relatively recent, cannot be ignored. Portugal will have to navigate a more uncertain international context in the coming years, which requires important reflection. Portugal must seek to have its own strategy beyond the European Union to strengthen relations with regions such as Portuguese-speaking Africa, Latin America and the United States or Asia, balancing economic interests with diplomatic stability. to maintain relevance and security in a rapidly changing world.