“The budgetary situation has improved considerably since the pandemic, and Portugal is on a good path regarding public finances,” stated Era Dabla-Norris, deputy director of the IMF’s Fiscal Affairs Department, at a press conference today.
In the Fiscal Monitor released today, the IMF projects a surplus of 0.2% this year and a balanced budget for 2026. However, most institutions monitoring the Portuguese economy forecast a deficit.
When questioned about this 2026 forecast, the official highlighted that the State Budget for 2026 (OE2026) “points to a balance close to equilibrium.”
“In Portugal, the OE2026 was presented to the parliament on October 10, and it is expected to be approved with broad political support,” she said, adding that the forecast of a 0.1% surplus in 2026 is “supported by a very strong primary balance, reinforcing Portugal’s commitment to sound public finances.”
The economist also noted that Portuguese public debt “peaked during the pandemic and is on a consistent downward trajectory,” expected to decline to less than 90% of GDP by the end of next year and continue to fall in the medium term.
The Government submitted the OE2026 to parliament, predicting that the Gross Domestic Product (GDP) will grow 2% this year and 2.3% in 2026.
The executive aims to achieve surpluses of 0.3% of GDP in 2025 and 0.1% in 2026. Regarding the debt ratio, it estimates a reduction to 90.2% of GDP in 2025 and 87.8% in 2026.
Meanwhile, the IMF, in the projections released this week, forecasts a growth of 1.9% in 2025 and 2.1% in 2026.
[News updated at 15:02]
