“This result fits, on one hand, into a European context of slower economic growth, high interest rates, and the significant weight of public debt,” states the EY study.
On the other hand, the consultancy points to the “context of macroeconomic and political uncertainty, with regional and global tensions affecting supply chains and, consequently, investor confidence.”
Nevertheless, Portugal remained among the top 10 most attractive European countries for Foreign Direct Investment (FDI) last year, due to a 21% increase in the number of new projects.
According to the study, the country “continues to stand out as a significant FDI hub in Europe, remaining on top in terms of project volume and job creation, which can be attributed to the resilience demonstrated by the country in the face of economic shocks and its strategic geographic position to attract FDI from outside Europe.”
The country hosted a total of 196 FDI projects, which represents a decrease of 11% in 2024, as despite the number of new projects entering Portugal exceeding the previous year by 21%, the number of expansion projects decreased by 50%.
Job creation linked to foreign investment slightly grew (1% compared to the previous year), contrasting with the significant European trend of decline (-16%).
In Portugal, the average job creation per project increased by 3% in 2024.
“Investors’ perception of Portuguese talent remains strong, with growing recognition of qualifications and innovation capacity, although concerns persist regarding the supply of critical skills in sectors like technology, engineering, and energy,” the EY analysis points out.
Despite remaining attractive, only 60% of the executives surveyed plan to establish or expand their operations in Portugal within a year, down from 84% in the previous survey, but slightly above the European average.
Confidence in medium-term prospects also softened, with 61% anticipating growth in Portugal’s attractiveness over the next three years, compared to 78% the previous year, although in line with Europe.
This study defines attractiveness as a combination of image, investor confidence, and perception of a country or region’s capability to offer the most competitive benefits for FDI. A total of 200 investors from different origins were surveyed: Western Europe (54%), North America (17%), Northern Europe (18%), Asia (6%), and Brazil (5%).
