The second proposal from the PSD/CDS governments led by Luís Montenegro arrives at the Assembly of the Republic three days before Sunday’s municipal elections, with the parties engaged in an electoral dispute, a scenario initially unlikely to encourage consensus.
However, unlike in October 2024, the government’s budget proposal for 2026 will enter Parliament without threats of opposition votes from major political forces: Chega and the PS.
Last year, in the first reaction to the Budget, the then PS parliamentary leader, Alexandra Leitão, stated, “There is no agreement with the Government, and from here on, we will analyze and decide in due time.” Ultimately, the PS under Pedro Nuno Santos enabled the first Budget of Luís Montenegro, but doubts about a potential opposing vote lingered until a week later (October 17), after a tense negotiation process.
André Ventura, the previous year, accused the Prime Minister of privately offering him a government position if Chega facilitated the Budget, prompting Luís Montenegro to accuse him of lying.
The State Budget proposal for 2026 (OE2026) will be submitted this Thursday, October 9, one day before the deadline set by law, according to today’s agenda note from the Ministry of Finance.
Lusa | 17:09 – 08/10/2025
Currently, available indicators suggest a different political climate, even with the country just days away from municipal elections.
The Minister of the Presidency, António Leitão Amaro, indicated that the upcoming Budget, in terms of content, will deviate from being a document of public policies – that is, without inherent ideological bias –, which, in his view, will ensure parliamentary approval.
The PS Secretary-General, José Luís Carneiro, stated that he will still analyze the Budget but noted that he viewed “favorably” the decision to exclude “fiscal and labor matters, as well as issues related to the National Health Service law, pensions, and social protection”.
André Ventura has sought to separate the budget issue from Chega’s electoral campaign for the municipal elections. His deputy, Rita Matias, after meeting with the Minister of Finance, argued that Chega should be the Government’s preferred partner.
In a similar approach, the President of the Liberal Initiative, Mariana Leitão – a party that voted against the PSD/CDS executive’s proposal in 2024 – expressed belief that the Budget will include liberal contributions already discussed with the Government.
The President of IL challenged the Government today to include liberal measures in the State Budget proposal for 2026, recalling that the executive has presented itself as “reformist.”
Lusa | 15:17 – 06/10/2025
Among parties represented in Parliament, only the PCP has already indicated it will vote against the Budget for 2026.
Content-wise, the Budget proposal is expected to include a 0.3 percentage point reduction in IRS rates applied from the 2nd to the 5th bracket. Additionally, in January 2026, IRS brackets are set to be updated by 3.51%, above the forecasted inflation rate for next year (around 2%).
During the current municipal election campaign, the Prime Minister, in his role as PSD president, announced that the Solidarity Allowance for the Elderly will increase by 40 euros next year, rising to 670 euros.
Luís Montenegro, PSD president, made this announcement in a speech during an electoral campaign event for Sunday’s municipal elections in Évora.
Lusa | 12:44 – 07/10/2025
Regarding the macroeconomic scenario, it is anticipated that the Government will set a target of 2.2% GDP growth in 2026 and maintain a budget surplus of about 0.1%.
In meetings with parliamentary parties, the Minister of Finance emphasized continuing the trajectory of reducing public debt as a percentage of GDP, potentially reaching 90% by the end of next year.
The second Budget crafted by the Finance team led by Joaquim Miranda Sarmento, already approved by the Council of Ministers, will be discussed in general at the end of the month, with the final global vote scheduled for November 27. Discover some of the measures.
Lusa | 08:02 – 07/10/2025
The general debate on the 2026 Budget proposal in Parliament will take place on October 27 and 28. The detailed budget process in plenary will begin on November 20, with the final global vote set for November 27.
