“Reflecting the downward trend in the inflation rate, the monetary policy is anticipated to remain relatively unchanged in 2026. By late August 2025, the three-month Euribor is expected to slightly decrease in 2026 to 2.0% (from 2.1% in 2025), according to the report accompanying the proposal, submitted to the parliament today.
Meanwhile, the long-term interest rates (10 years) in the euro area are projected to continue their upward trend in 2026, reaching 3.4%, compared to an estimated 3.1% for this year.
Reflecting the downward trend in the inflation rate, the government anticipates that the eurozone’s monetary policy will remain relatively unchanged in 2026: “Expectations indicate the continuation of the interest rate cuts cycle in the US, in contrast to the European Central Bank, whose more accommodative monetary policy stance is expected to have concluded,” it states.
The government submitted the OE2026 to parliament today, ahead of the deadline and three days before the municipal elections on Sunday.
In the macroeconomic scenario, the PSD/CDS-PP government forecasts that the Gross Domestic Product (GDP) will grow by 2% this year and 2.3% in 2026.
The administration aims to achieve surpluses of 0.3% of GDP in 2025 and 0.1% in 2026. As for the debt ratio, a reduction to 90.2% of GDP in 2025 and 87.8% in 2026 is estimated.
The proposal will be discussed and voted on in general between October 27 and 28. The final overall vote is scheduled for November 27, following the detailed debate process.
