Portugal recorded a budget surplus of 1.9% in the second quarter, as reported by the National Institute of Statistics (INE) on Tuesday.
“The positive balance of the Public Administrations sector, as a percentage of GDP, stood at 0.5% in the year ending in the 2nd quarter of 2025, 0.2 percentage points less than observed in the previous quarter. Considering quarterly values rather than the year ending in the quarter, the Public Administrations balance in the 2nd quarter of 2025 reached 1,412 million euros, corresponding to 1.9% of GDP, compared to 2.5% in the same period last year,” reads the INE report.
Revenue grew by 4.6% year-on-year, while expenditure increased by 6.3%.
In terms of revenue, there were notable increases in tax revenue from production and imports (6.6%) and social contributions (1.9%), with capital revenue growing by 53%, mainly due to increased income from the Recovery and Resilience Plan (PRR).
Conversely, on the expenditure side, growth was noted in employee remuneration (7.7%), interest charges (1.9%), social benefits charges (4.7%), and intermediate consumption (2.4%).
Meanwhile, the expenditure category for subsidies decreased by 12.2%.
The Minister of State and Finance, Joaquim Miranda Sarmento, stated today that the “marked” revision of public debt is “good news” and “a sign of a prudent and responsible budget trajectory.”
Lusa | 12:23 – 23/09/2025
In semi-annual terms, in the first half of the year, the surplus was 1% of GDP in national accounting, the same as in the same period in 2024.
“The amount of capital injections and debt assumptions in the 1st half of 2025 was entirely allocated to entities in the Public Administrations sector, with no impact on the aggregate balance,” indicates the INE.
The government expects to achieve a budget surplus of 0.3% of GDP this year and 0.1% in 2026, according to the report submitted to Brussels in April.
The Ministry of Finance reacted to the data in a statement, pointing out that “the continued maintenance of the budget surplus, despite the execution of tax relief measures and revision of Public Administration careers, is the result of a prudent and solid budget policy that Portugal has been following.”
The Ministry led by Joaquim Miranda Sarmento also highlights the reduction in the public debt ratio, results that “have strengthened confidence in Portugal’s budgetary and financial situation, as evidenced by the recent rating upgrades by S&P and Fitch.”
However, “it is essential not to interrupt this cycle of budget balance and public debt reduction so that Portugal can reach the end of the decade with public debt below 80% of GDP, reinforcing market and investor confidence in our country,” it advocates.
“The gross debt of Public Administrations has decreased to 93.6% of GDP (96.9% the previous year),” states the document released today by the National Institute of Statistics (INE), the second notification.
Lusa | 11:55 – 23/09/2025
[News updated at 14:29]
