During a press conference in Brussels, European Economy Commissioner Valdis Dombrovskis expressed expectations that Portugal would maintain prudent fiscal policies after several years of surplus, despite facing slower-than-expected economic growth. “We estimate a small deficit next year, obviously under a scenario of unchanged policies,” he stated.
Dombrovskis added, “Portugal has consistently followed a prudent fiscal policy over the past year, and we anticipate that the debt-to-GDP ratio will continue to decrease substantially over this year’s and next year’s forecast horizon.”
The European Commission has estimated that Portugal will achieve a budget surplus of 0.1% of its Gross Domestic Product (GDP) this year, which is expected to turn into a 0.6% deficit in 2026, according to the spring economic forecasts released today.
These projections are lower than the November forecasts, which predicted a 0.4% surplus this year, and they are also more pessimistic than the estimates outlined in the State Budget for 2025 (OE2025).
Simultaneously, the European Commission has revised down its growth forecast for the Portuguese economy this year to 1.8%, but now expects the GDP to grow by 2.2% in 2026.
In the OE2025, the government of Luís Montenegro projected a 0.3% GDP surplus, and the AD included in its electoral program a balance of 0.1% of GDP for 2026.
When asked about differences in growth projections, Valdis Dombrovskis explained, “This is basically due to the fact that the Commission’s forecasts already consider the provisional GDP estimate for the first quarter of this year, which was somewhat more negative.”
According to the flash estimate released by the National Statistics Institute (INE), the Portuguese economy grew by 1.6% year-on-year in the first three months of the year and contracted by 0.5% compared to the previous quarter.
