Portugal has slipped one spot to 37th place in the IMD World Competitiveness Ranking 2025, but it still ranks ahead of Spain (39th) and Italy (43rd). The country continues to stand out for its infrastructure and government efficiency, despite ongoing economic and business challenges, according to data from the IMD Institute in partnership with Porto Business School.
In infrastructure, Portugal performs strongly, coming in at 25th place, bolstered by solid scores in education (21st) and investments in scientific and basic infrastructure. However, weak points remain—Portugal ranks 61st in food waste and 56th in dependency ratio.
Government efficiency improved notably, jumping six places to 35th, thanks to stronger fiscal policy, public finances, and institutional framework. The country also ranked 1st globally for foreign investor trust and having a freely elected government. But it continues to struggle with issues like the real tax burden (66th) and justice system efficiency (59th).
Meanwhile, business efficiency and economic performance dipped, with Portugal falling to 42nd from 39th. Still, investors cite the availability of skilled labor, reliable infrastructure, competitive costs, and a high level of education as key draws. The country’s fiscal policy remains its least attractive feature.
Strategic challenges highlighted for Portugal include diversifying the economy beyond tourism, strengthening education in digital and green skills, and reforming public services, bankruptcy, and corporate restructuring laws.
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