Portugal's Inflation Falls Further Compared to UK, US, and Eurozone as Investor Confidence Grows

Investor confidence in Portugal is at an all-time high. Its stable economic environment attracts businesses and high-net-worth individuals, family offices, and institutions seeking secure investment opportunities. While major economies such as the UK, the US, and the wider Eurozone grapple with rising inflation, Portugal’s financial stability is reinforcing investor confidence.

In January 2025, Portugal’s consumer price inflation fell to 2.5% from 3.0% in December 2024, highlighting a consistent downward trend that reflects strong economic policies and careful fiscal management.

Meanwhile, the Eurozone’s inflation rate rose to 2.5% in January 2025 from 2.4% in December 2024, despite the European Central Bank (ECB) implementing four consecutive interest rate cuts since June 2024, bringing rates down from 4% to 2.75% by January 2025.

However, Portugal has resisted this trend, maintaining a more controlled inflationary environment. According to Finance Minister Joaquim Miranda Sarmiento, Portugal’s government projects GDP growth of 1.8% in 2024 and 2.1% in 2025

Across the Atlantic, inflation in the US rose unexpectedly to 3% in January 2025, up from 2.9% in December 2024, significantly overshooting the Federal Reserve’s 2% target. Similarly, in the UK, inflation surged from 2.5% in December 2024 to 3% in January 2025, marking its highest level in ten months. The persistence of high costs in food, non-alcoholic beverages, and transport has caught economists by surprise.

Portugal’s strong economic performance has not gone unnoticed. The country’s economic rating was recently upgraded from ‘A’ to ‘A+’ in the latest international assessment, further cementing its reputation as a financially stable environment.

Investor confidence in Portugal is also at an all-time high, with 84% of entrepreneurs surveyed by Ernst & Young (EY) planning to expand or establish operations in the country, compared to 72% for the Eurozone and 69% for the UK. The EY report further revealed that 77% of global executives anticipate an improvement in Portugal’s investment attractiveness over the next three years, significantly surpassing expectations for the wider Eurozone (67%) and the UK (59%).

Paul Sheedy, international advisor to the Portugal Future Fund, stated:

“We’ve seen an uptick in investors turning their interests to Portugal. The Golden Visa residency-by-investment programme continues to attract HNWIs looking to relocate to Portugal while also potentially benefitting from a €500,000 investment in one or more of the regulated and approved alternative investment funds for Golden Visa.

“Portugal offers not only stability but a high quality of life, low cost of living, and the opportunity to benefit from and contribute to the country’s economic growth.”

According to Finance Minister Joaquim Miranda Sarmiento, Portugal’s government projects GDP growth of 1.8% in 2024 and 2.1% in 2025.

The country’s property market is also thriving, particularly in the luxury segment, but this is not available any longer for Golden Visa residency-by-investment in Portugal. Recent data forecasts a strong +5.8% growth for 2025, outperforming the broader EU and UK property markets, which are expected to decline by -2.5% over the same period. This further strengthens Portugal’s position as a leading investment destination within Europe.

Portugal’s inflation reduction, by contrast, has been driven by notable decreases in key sectors. The cost of food and non-alcoholic beverages dropped significantly (1.4% vs. 3.4% in December 2024), along with housing and utilities (3.5% vs. 7.1%), according to Trading Economics. Even transport costs saw a slight decline (2.4% vs. 2.5%), further easing financial pressures on Portuguese households.

Although some categories experienced minor increases—such as recreation and culture (4.0% vs. 2.5%) and restaurants and hotels (5.6% vs. 5.2%)—the overall inflation trajectory remains firmly under control, making Portugal an increasingly attractive investment destination.

Paul Stannard, chairman and founder of Portugal Pathways and the Portugal Investment Owners Club, noted:

“With a strong grip on inflation, Portugal stands out across Europe for its economic resilience and investor confidence, which is at an all-time high compared with some major countries such as the UK, the US, and the wider Eurozone.

“We’ve found that our community is drawn to Portugal for its stability, cost of living, lifestyle and culture, and the welcoming approach to people relocating or investing in the country. The Golden Visa residency-by-investment programme and the new Tax Incentive for Scientific Research and Innovation (IFICI) tax regime, or NHR 2.0 tax regime as it’s often known, continue to attract investors, entrepreneurs, and their families.”

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About Portugal Future Fund

The Portugal Future Fund strategically invests in high-growth sectors to drive economic innovation. Approved for Portugal’s Golden Visa residency-by-investment, it provides investors with an exclusive opportunity to participate in Portugal’s ongoing development.

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Disclaimer: The information on the Portugal Future Fund website and in email communications is for general informational purposes only and should not be construed as legal, tax, or financial advice. You should consult and check with a qualified professional advisor before relying on any information provided on this website or in email communications. As it relates to investments in Golden Visas or other wealth management solutions offered by regulated and professional advisors, it is important to note that past performance is no guarantee of future returns. Private equities can be highly illiquid and come with risk and should always be under professional independent advice. Portugal Future Fund operates under CMVM regulations but is not directly endorsed by the CMVM or any governmental entity.

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