Boom with a view: our economy of the year - The Economist Podcasts Recap

Podcast: The Economist Podcasts

Published: 2025-12-30

Duration: 22 minutes

Guests: Callum Williams

Summary

Portugal emerged as the best-performing economy of 2025, largely due to its booming tourism sector and favorable tax policies. Meanwhile, Dalit cuisine in India remains underappreciated, and London's river boats are seeing a resurgence.

What Happened

Portugal was named the best-performing economy of 2025, with strong performances in tourism and favorable tax policies attracting foreign residents. This marks the fourth consecutive year a Southern European country has topped the rankings, following Spain and Greece in previous years.

Portugal's success is contrasted by the struggles of Estonia, Finland, and Slovakia, which have been negatively impacted by the energy price shock following Russia's invasion of Ukraine in 2022. These countries, along with Britain and Germany, have struggled to control inflation and maintain economic growth.

Inflation remains a significant issue for many countries, with Turkey and Estonia particularly affected. While some countries like Sweden are experiencing 0% inflation, economists warn that deflation could lead to economic stagnation.

Employment growth has been a positive indicator for Southern Europe, with countries like Ireland and Portugal showing strong job creation. However, negative job growth in South Korea highlights the challenges faced by some economies.

In stock markets, the American market had a good year, but countries like Israel outperformed. Denmark's market struggled due to declines in major companies like Nova Nordisk.

The episode also highlights the overlooked Dalit cuisine of India, a unique culinary tradition with roots in the country's lower caste communities. Despite its rich flavors, this cuisine remains largely unknown outside of rural areas.

Finally, London's river transport is experiencing a revival, with commuter numbers rising post-pandemic. Though not yet a primary mode of transport due to higher costs, efforts are underway to make river travel more sustainable and frequent.

Key Insights

• Portugal was named the best-performing economy of 2025, driven by robust tourism and favorable tax policies that attracted foreign residents. This marks the fourth consecutive year a Southern European country has topped the rankings.
• Estonia, Finland, and Slovakia have faced economic struggles due to the energy price shock following Russia's 2022 invasion of Ukraine. These countries, along with Britain and Germany, have struggled to control inflation and maintain economic growth.
• Turkey and Estonia are experiencing significant inflation, while Sweden has achieved 0% inflation. Economists caution that deflation, although seemingly positive, could lead to economic stagnation.
• London's river transport is seeing a revival with increasing commuter numbers post-pandemic. Efforts are underway to make river travel more sustainable and frequent, despite current higher costs compared to other transport modes.