The Portuguese economy recorded a budget surplus of 0.2% of the gross domestic product (GDP) in the first three months of the year, as reported by the National Institute of Statistics (INE) on Tuesday.
“The positive balance of the Public Administrations (PA) sector, as a percentage of GDP, stood at 0.8% in the year ending in the 1st quarter of 2025, 0.1 p.p. more than observed in the previous quarter. Considering the quarterly values and not the year ending in the quarter, the PA balance in the 1st quarter of 2025 reached 125 million euros, corresponding to 0.2% of GDP, compared to -0.4% in the same period last year. Compared to the same period of the previous year, there was a 7.8% increase in revenue and a 6.4% rise in expenditure,” the INE report states.
This announcement comes as the Minister of Finance remains confident in the estimated 0.3% GDP surplus for the year as a whole.
In a parliamentary discussion on the Government Program, Joaquim Miranda Sarmento recalled that the AD Government “exceeded expectations” last year, achieving a surplus of 0.7%, “more than triple what the previous government had forecast”.
For 2025, the Government maintains the “commitment to budget balance” and projects a surplus of 0.3% of GDP, even though there are already institutions monitoring Portuguese public accounts that project a return to budget deficits this year or next.
INE reports that the “Portuguese economy recorded a financing capacity of 2.2% of GDP in the 1st quarter of 2025, reflecting a decrease of 0.6 percentage points (p.p.) compared to the previous quarter”.
“Gross National Income (GNI) and Gross Disposable Income (GDI) increased by 1.1% and 1.0%, respectively (2.1% and 2.0% in the previous quarter, respectively). The reduction in the economic balance reflected the decrease in the balances of financial and non-financial corporations and households,” the report mentions.
Furthermore: “Household GDI increased by 1.3% compared to the previous quarter, with increases of 1.7% and 1.4% in received compensation and Gross Value Added (GVA), respectively. The growth in GDI, coupled with a 1.5% increase in final consumption expenditure (1.9% in the previous quarter), determined the reduction of the household savings rate to 12.4% (12.5% in the previous quarter). Household financing capacity stood at 4.4% of GDP, 0.2 p.p. less than the previous quarter. In real terms, adjusted per capita household GDI grew by 0.5% in the 1st quarter of 2025 (growth of 2.0% in the 4th quarter of 2024)”.
“The deficit of Non-Financial Corporations (NFC) worsened by 0.3 p.p. in the 1st quarter of 2025, standing at -5.5% of GDP. GVA and paid compensation increased by 1.1% and 1.8%, respectively, while Gross Fixed Capital Formation (GFCF) grew by 1.7%. In turn, the balance of Financial Corporations stood at 2.4% of GDP (0.2 p.p. less than in the previous quarter),” it further notes.
From a public accounting perspective (which accounts for cash flow), the State registered a surplus of 1,592.3 million euros by March, according to budget execution data released by the Directorate-General for Budget (DGO).
The balance calculated by INE differs from that of the DGO, as it is in national accounting (which is relevant for European institutions), meaning it is calculated considering a commitment to revenue and expenditure.
[News updated at 11:08]
