Portugal’s government forecasts the economy will grow by 2% this year and in 2025, with anticipated budget surpluses of 0.3% in 2024 and 0.2% the following year.

This data, shared with political parties during the ongoing meetings on the 2025 State Budget (OE205) and obtained by Lusa, indicates inflation slightly above 2%.

The 2% growth forecast for 2024 is marginally higher than previous estimates in the Stability Programme, which projected growth between 1.5% and 1.9%, but aligns with earlier statements made by Finance Minister Miranda Sarmento, The Portugal News reports.

In regard to revenue, Luís Montenegro’s government forecasts growth of 4% to 4.5% in 2024 and 2025. 

However, primary current expenditure (excluding public debt charges) is expected to rise at a faster rate this year compared to 2025. The government projects expenditure growth of 8% in 2024, while for 2025, it anticipates a more moderate increase of 4% to 5%.

The data also projects that interest expenditure on public debt will increase by €500 million this year compared to 2023, and by an additional €300 million in 2025 compared to 2024.

The budget surplus forecast in this macroeconomic scenario, which is being shared with the parties, points to a surplus of 0.3% of GDP this year, slightly decreasing to 0.2% next year. The 2025 surplus will already reflect the impact of tax measures and toll reductions approved by the opposition.

The government is required to submit the 2025 State Budget proposal to parliament by 10th October.