Which economy did best in 2025?

It could have been a lot worse. In April, as President Donald Trump started his trade war, investors and many economists braced for a steep global recession. In the end, global gdp will probably grow by around 3% this year, the same as last. Unemployment remains low almost everywhere. Stockmarkets have logged another year of respectable gains. Only inflation is really a worry. Across the oecd it remains above central banks’ 2% targets.

This aggregate performance conceals wide variation. So for the fifth year in a row, we have searched for the “economy of the year”. We have compiled data on five indicators—inflation, “inflation breadth”, gdp, jobs and stockmarket performance—for 36 mostly rich countries. We have ranked them according to how well they have done on each measure, creating an overall score of economic success in 2025. The table below shows our rankings.

It is yet more good news for southern Europe. After Spain’s victory last year, Portugal is our best-performing economy this time round. In 2025 it has combined strong gdp growth, low inflation and a buoyant stockmarket. Other members of the euro area that struggled in the 2010s, including Greece (our winner in 2022 and 2023) and Spain, are also near the top. Elsewhere, Israel has continued its strong recovery from the chaos of 2023, and Ireland only just misses out on top spot. Colombia has enjoyed both strong economic growth and a flourishing stockmarket.

The laggards, meanwhile, are mainly northern European. Estonia, Finland and Slovakia jostle at the bottom. Germany does a bit better than in previous years, but still not well, dragged down by a weak job market. Britain has had a similarly “meh” year. (France, despite political chaos, scores pretty well.) Across the Atlantic, America ranks only in the middle—and does worse than Italy. Its job market is strong but not spectacular. Relatively high inflation drags down its overall score.

Indeed, our first measure is core inflation, which strips out food and energy prices owing to their volatility. A country does better on our ranking the closer its annual rate is to 2%, the typical target for central bankers. Turkey’s inflation is miles above rates found anywhere else because of the crazy economic policies of Recep Tayyip Erdogan, its president. Estonia is second worst, with core inflation of nearly 7% in the third quarter of 2025, as it continues to recover from the energy shock of 2022. Plenty of other countries have struggles of their own. Britain’s core inflation rate is lower than it was this time last year. But at 4% it is still well above where the Bank of England would like it to be.

In some countries core inflation is too low. This includes Sweden, where it is almost non-existent. To many consumers, fed up after four years of sharply rising prices, that might sound wonderful. Yet in such a scenario economists worry about deflation, which discourages spending and raises real debt burdens. Having a little bit of inflation is better than having none at all. A cluster of other countries, including Finland and Switzerland, have similarly anaemic readings. Although Japan has higher inflation than in the 2010s, it is nothing like the overheating elsewhere.

“Inflation breadth” tells a similar story. The measure tracks the share of items in the consumer basket where prices are rising by more than 2% a year. In some countries it has jumped, including America, perhaps as a result of gung-ho fiscal policy. Even today, the prices of more than 85% of the items in Australians’ consumer baskets are rising by more than 2% annually.

What about growth and jobs—the other economic indicators that voters care deeply about? Here, Portugal stands out. Tourism has boomed, while plenty of rich foreigners are moving to the country to take advantage of its low tax rates. gdp growth is comfortably above the European average. The Czech Republic posts decent increases in both output and employment, pushing it into the top third of our ranking. By contrast, South Korea has shed jobs. Norway, heavily exposed to commodities and shipping, has struggled with a slowdown in global trade.

In the third quarter of this year Ireland registered economic growth of more than 12% year on year, which is spectacular—and also misleading. The many large multinational firms that book profits in the country distort its national accounts. Irish economists therefore prefer to use “modified total domestic demand”, a similar measure produced by the national statistics office, which removes many of these distortions. We have followed suit.

Equity markets round out our assessment. You might expect America’s stocks to be runaway winners. Uncle Sam’s share-price gains are merely respectable, however. The country’s elevated markets mostly reflect success in previous years. France has also seen so-so performance, with the shares of its most valuable company, lvmh, treading water. On this measure, nowhere has done worse than Denmark. In the past year the share price of Novo Nordisk, maker of Ozempic, has fallen by 60%, as the company has lost its lead in the market for weight-loss drugs.

For sizzling stockmarket profits, investors should look elsewhere. Although Czech and South Korean firms have done well this year, nowhere has done better (in local-currency terms) than Israel. In the past year the share price of the country’s most valuable listed company, Bank Leumi, has risen by around 70%. Portuguese investors have done well, too, with the country’s stockmarket rising by more than 20% in 2025. And there could be more to come. According to our calculations, the stockmarket of the country we nominate as “economy of the year” increases by on average 20% in the following year. We don’t give investment advice, but… ■