The Ministry of Finance has highlighted that the International Monetary Fund (IMF) projects a budget surplus of 0.5% of GDP for 2025, exceeding the government’s forecast of a 0.3% surplus outlined in the Medium-Term Budgetary Plan, submitted to Brussels in October 2024 and approved by the European Commission without reservations.
For 2026, the budget balance is aligned with the government’s projection of 0.1% of GDP, according to official statements.
The IMF anticipates that public accounts will maintain a slight budget surplus, with a forecasted ‘surplus’ of 0.1% of GDP between 2027 and 2030.
These results, the Ministry noted, are primarily due to the reduction in public expenditure as a percentage of GDP starting in 2026, marking the conclusion of the impacts from the Recovery and Resilience Plan (PRR).
The Ministry outlines that these predictions occur in a context where the IMF foresees worsening deficits in various European countries, particularly within the eurozone, where the average deficit is expected to slightly worsen.
Furthermore, the Ministry of Finance states that the IMF foresees a continued decline in Portuguese public debt, projected to reach 92% of GDP in 2025, 88% in 2026, and 84.7% in 2027, approaching 75% of GDP by the end of the decade.
Currently, the IMF has revised down its GDP growth outlook for Portugal this year to 2%, compared to previous estimates in October, falling short of the government’s predictions.
The projections for 2025 signal a growth rate of 2%, lower than the 2.3% estimated in October.
In its draft Budget for 2025, the government anticipates a GDP growth of 2.1%.
For 2026, the IMF forecasts a national GDP growth of 1.7%.
The IMF also provides projections for inflation, with consumer prices expected to fall to 1.9% in 2025 and rise to 2.1% in 2026.
Meanwhile, unemployment is predicted to remain stable, with the IMF projecting a rate of 6.4% this year and 6.3% in 2026.
