However, it continues to surpass countries such as Spain (39th) and Italy (43rd). Despite the business and economic challenges that persist, the country stands out for its infrastructure and government efficiency.

“This drop ultimately shows that, although we continue to be ahead of Spain and Italy, there are increasingly other countries competing with us that end up performing better”, highlights Filipe Grilo, economist at Porto Business School, in statements to ECO.

Portugal's score stumbles in two of the four key indicators of this study. In terms of business efficiency and economic performance, it drops three positions to 42nd place (39th in 2024). On the other hand, in terms of government efficiency, it rises six positions to 35th place (41st place last year) and in terms of infrastructure, it rises one place to 25th place.

“When we look at the different variables that make up this entire ranking, we continue to identify weaknesses that are recurring, namely the high tax burden, the inefficient justice system and, within companies, we know that there is insufficient training of workers and, with this, the brain drain”, lists Filipe Grilo. Although these “problems are already known”, Portugal “continues to have great difficulty” in solving them.

The study, which assesses 69 economies, highlights Portugal’s rise to 25th place in terms of infrastructure – the best performance among the four factors analysed. This was helped by the continued good results in education (21st), benefiting from the optimization of basic infrastructure (16th vs. 33rd in 2024) and science (26th). In this area, Portugal also stands out for its population growth and secondary school enrollment rate (both 2nd place). Among its weaknesses are food waste (61st) and the dependency ratio (56th).

“Portugal has good infrastructure, not only basic infrastructure, but also transport networks, internet and progress in terms of enrollment rate — qualification is perhaps the main achievement of recent years,” highlights the specialist from Porto Business School. However, Filipe Grilo notes that although the country “produces a lot of talent and a lot of qualified labour, it is unable to absorb” talent.