Portugal drops three places in global competitiveness ranking
The Portuguese economy has fallen to 40th place in the IMD’s global competitiveness ranking, which assesses 70 countries. Of the four pillars analysed, Portugal only improved in ´Economic Performance´.
In the four pillars evaluated, Portugal only improved in “Economic Performance,” regressing in the other three indicators.
The results suggest, despite the improved economic context, that the country continues to lose ground in areas crucial for long-term competitiveness, such as the efficiency of institutions, businesses, and infrastructure.
In the ‘Economic Performance’ category, Portugal climbed seven positions to 35th place, driven by an improvement in the ‘International Investment’ indicator, which rose from 33rd to 21st position. The domestic economy also improved, from 54th to 49th place, while international trade fell from 22nd to 25th position.
In the ‘Business Efficiency’ category, the country fell from 42nd to 45th position. This decline is mainly due to performance in management practices (53rd place), the labor market (46th), and productivity (48th), coupled with persistent weaknesses in entrepreneurship, the size of SMEs, worker training, and companies’ financial skills.
In the ‘Government Efficiency’ category, Portugal fell six positions, from 35th to 41st place. The only improvement recorded was in the fiscal policy indicator, which rose from 56th place in 2025 to 54th in 2026.
The analysis, developed annually by the Swiss business school IMD, in partnership with Porto Business School, underlines that, “in Government Efficiency, the predictability of the institutional, fiscal and regulatory framework continues to condition the decision to invest and grow, with fiscal policy, public finances and business legislation among the main challenges, requiring simple, stable and execution-oriented public policies”.
Portugal’s best performance continues to be in the ‘Infrastructure’ category, where it occupies the 31st position. Even so, this represents a drop of six places compared to 2025, when it occupied the 25th position.
The best results are seen in the sub-categories of ‘Education’ and ‘Technological Infrastructure’, in which the country ranks 23rd and 25th, respectively.
“Portugal has excellent professionals, attracts investment, and is an economy open to the world. But the competitiveness of the future is not measured by the assets we have; it is measured by how we transform them into productivity, innovation, scale, and impact,” warns José Esteves, dean of Porto Business School.
José Esteves argues that Portugal “needs more agile companies, more effective institutions, and leaders prepared to execute better, adapt faster, and create value sustainably.”
Source: ECO Online
