Tag Archives: budget deficit

Bank of Portugal Projections Point to Return to Deficit

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According to the Bank of Portugal’s June 2025 Economic Bulletin, after a surplus of 0.7% of GDP in 2024, the Portuguese economy is expected to record a budget deficit of 0.1% in 2025, with increases to 1.3% in 2026 and 0.9% in 2027.
The expansionary fiscal stance observed in 2024 is expected to persist in the following years, albeit with some reversal in 2027. The balance sheet points to a further deterioration in the structural primary balance, reflecting the impact of the announced measures and the adverse economic cycle.
This scenario reinforces the need for public spending restraint and clear strategies to ensure fiscal consolidation in the medium term.

CFP Expects Deficit in 2026 After Temporary Balance

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CFP Expects Deficit in 2026 After Temporary Balance

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.