The Public Finance Council (CFP) emphasizes that, despite a fiscal surplus of 0.7% of GDP in 2024, fiscal policy remained expansionary and countercyclical, which could jeopardize the sustainability of public finances in the future. The positive balance was driven largely by the exceptional performance of the Pension Funds and the Regional and Local Administration. However, the deterioration of the Central Administration’s balance, which recorded a deficit of 1.5% of GDP, and the sharp growth in personnel and social benefit spending indicate lasting costs that could put pressure on the budget. Public revenue, while robust, grew unevenly, particularly for ICMS (Tax on Goods and Services) and IRPJ (Corporate Income Tax), and the tax burden reached 35.6% of GDP. The CFP warns that, in 2026, the country is expected to return to deficits—estimated at 1% of GDP—and public debt is unlikely to resume its downward trend, jeopardizing compliance with European fiscal targets.
Portugal recorded 0.6% quarter-on-quarter economic growth in the second quarter of 2025, reversing the 0.4% contraction of the previous quarter, according to the National Statistics Institute. On an annual basis, GDP grew 1.9%, up from 1.7% in the previous quarter. This performance is mainly due to the recovery in private consumption, a key driver of economic activity. Despite this boost, the Bank of Portugal revised its growth forecast for the full year downward, reducing it from 2.3% to 1.6%, due to tensions in international trade. The government, however, maintains a more optimistic stance, maintaining its expectation at 2.1%. This scenario suggests some resilience in the Portuguese economy, but also reinforces the need for policies that foster investment, diversify export markets, and encourage sustainable consumption.
Official data reveal that the deficit of the National Health Service (SNS) almost doubled until May compared to the same period in 2024, reaching a hole of €465 million, reflecting a worsening of €312.4 million compared to the previous year. This result is mainly due to the increase in personnel costs (growth of 13.6%) and the pressure exerted by inflation on medical supplies.
The growth in spending on human resources, partly due to salary updates and partly due to extraordinary hiring in a post-pandemic context, is the main factor in the budgetary deterioration of the SUS. At the same time, operating costs have soared due to the rise in the prices of energy, services and hospital maintenance.
The situation is a cause for concern for healthcare professionals and hospital managers, who warn of the risk of compromising the quality and effectiveness of the services provided. Without additional containment measures, public funding may be insufficient to cover emerging needs, especially in critical specialties.
The government has already admitted to reviewing its forecasts for the public deficit and highlights the urgent need to promote reforms in the healthcare sector, including better financial planning, spending control and investment in digitalization and hospital management.
The National Treasury announced the launch of new *Treasury’s Retail Verbrief Bonds* (OTRV), a return on debt issuances aimed at individual investors, with maturities in six years and a rate indexed to the 6-month Selic rate plus a premium of 0.25%. This offering represents an alternative to savings certificates, increasing competition in fixed-income instruments available to the public.
The initiative arose as part of a strategy to diversify sources of financing and attract small savers, at a time when the European Central Bank (ECB) is progressively reducing interest rates. The Institute of Financial Management and Public Debt (IGCP) will fulfill, by the end of May, approximately 47% of the annual issuance plan, which suggests continuity in the capture of national savings.
For investors, the proposal is attractive given the expectation that the Selic rate will remain above 2% for 6 months, offering a return adjusted to sovereign credit risk. Even so, caution is advised, since European money market conditions may evolve, affecting the cost of financing for the State.
This operation reveals changes in the affiliation of domestic investors, who now seem to prefer instruments with variable rates and shorter terms, in contrast to traditional savings accounts linked to the State.
The Jornal Económico reports that BPI recorded profits of 588 million euros in 2024, an increase of 12% compared to the previous year, reflecting the growth in credit and the performance of the insurance sector.
The strong performance demonstrates the solid recovery of the banking sector after the pandemic, despite challenges such as inflation and regulatory changes.
This positive scenario may translate into greater dynamism in credit operations and increased capital for future investments.
Data from Jornal Económico indicate that the interest rates offered by Portuguese banks for term deposits are decreasing faster than the ECB’s rate cuts.
On average, the one-year remuneration was **1.605%**, compared to a Euribor of 2.525% in January.
This divergence affects the attractiveness of term deposits and leads depositors to reconsider investment alternatives, reflecting the tension between banks and the ECB in monetary policy.
The Public Finance Council (CFP) updated its projections and predicts that, after a balanced budget in 2025, the country could return to a deficit of around 1% of GDP in 2026, due to ongoing spending and commitments made throughout the legislature.
The CFP emphasizes that these projections do not yet consider the effects of meeting NATO targets or possible new external tariffs, such as those from the US.
This potential deficit scenario requires a review of fiscal policies, especially with regard to current spending and execution of the RRP investment.
The National Statistics Institute (INE) announced that Portugal ended 2024 with a budget surplus of 0.7% of GDP, above the 0.4% forecast by the Government. This result reflects higher revenues and reasonable containment of public spending, reinforcing the resilience of public finances in a context of economic adjustment.
The surplus, although positive, contrasts with more conservative forecasts from bodies such as the Bank of Portugal, which are already warning of potential deficits in 2025.
This development highlights the importance of rigorous fiscal management and opens space for future decisions on public investments and tax burden reduction.
The annual approval of accounts in commercial companies is a fundamental process to ensure transparency and financial compliance, and companies in Portugal must comply with the rules, established legal requirements and observe legal deadlines to avoid penalties.
Annual approval of accounts is a legal obligation for all commercial companies.
The process involves the analysis and approval of the accounting statements, regardless of the type of company/corporation, including the balance sheet, the income statement and the management report.
Civil companies in commercial form are subject to the provision of accounts, as are European public limited companies, public companies, companies with headquarters abroad and permanent representation in Portugal (in the part concerning the permanent representation itself) and individual establishments with limited liability.
Approval of accounts is essential to ensure transparency and accountability to partners and shareholders, suppliers, customers, the state, banks and other interested parties. The annual approval of accounts helps to assess the company’s financial performance and identify possible areas for improvement and action by the company.
The process of annual approval of accounts in commercial companies in Portugal generally occurs as follows:
• Preparation of financial statements by the company’s management • Review of financial statements by certified public accountant and/or external auditor (if applicable) • Convening of the General Meeting of shareholders/partners to approve the accounts • Presentation of financial statements to shareholders/partners during the General Assembly meeting • Discussion and voting to approve the company’s accounts • Preparation by the company of the minutes of the General Assembly meeting, in which the decisions taken there will be recorded.
After the accounts have been approved, the accounting report is registered, which is translated into the deposit of the information that forms part of it.
The registration obligation is fulfilled through the submission of the IES (Simplified Business Information), thus fulfilling the obligations of submitting the annual declaration of accounting and tax information to the Tax Authority, the provision of accounts to the Commercial Registry Office, in addition to the provision of information for statistical purposes to the INE, the Bank of Portugal and the Directorate-General for Economic Activities.
The accounting record will include:
– minutes of approval of the accounts for the year and the application of results
– balance sheet, income statement and annex to the balance sheet and income statement
– demonstration of results
– statement of changes in equity/net worth
– cash flow statement
– attached to the financial statements, the legal certification of the accounts (if applicable)
– the opinion of the supervisory body, if applicable.
The legal deadlines established for the submission of the registration of the financial statements, which in the case of public limited companies (single-member or not), must be carried out by the 15th day of the seventh month following the date of the end of the financial year, as a rule coinciding with the end of the calendar year, therefore the financial statements must be registered by July 15th.
Failure to comply with the established deadlines may result in fines and other financial penalties and other legal consequences, including the impossibility of distributing dividends to shareholders/partners or completing registrations with the competent Commercial Board.
If you’re setting up a company in Portugal, here are some key facts you need to know:
✅ Every company must have at least one manager (gerente). ✅ Company managers are required to pay Social Security (Segurança Social). ✅ If a manager is already paying Social Security in another EU country, they can request an exemption in Portugal. However, this requires proof with an A1 form, which must be renewed every year. ✅ Fiscal Number (NIF) ≠ Social Security Number (NISS) – these are separate and serve different purposes.
Make sure your company stays compliant! For more details, consult a financial expert.
