The new minority government in Portugal will keep balanced budgets, continue to lower the public debt and undertake privatisation of flag carrier TAP, it was announced in its inaugural legislative programme on Wednesday.

Prime Minister Luis Montenegro's centre-right Democratic Alliance (AD) coalition secured a narrow victory in the election on 10th March, and experts anticipate his administration facing challenges in a divided parliament.

During the previous Socialist government's tenure, Portugal experienced a significant shift, achieving a budget surplus of 1.2% of GDP last year, surpassing expectations after having a deficit of 0.3% in 2022, Reuters reports.

Although the Socialists had forecast a surplus of 0.2% for this year, the new government has not offered any precise projections.

There was no immediate clarification on whether the government intended to sell the entirety of TAP or only a portion of the airline. Montenegro had indicated to Reuters in December that his intention was to fully privatise TAP.

The prior government had approved the sale of a minimum of 51% of TAP in September, but the process came to a halt. 

The comprehensive plan, encompassing tax cuts for both families and businesses, increased pensions, and salary increases for police, teachers, and doctors, will undergo parliamentary debate later this week. If no party submits a motion of rejection, it will be automatically approved.

Cabinet Affairs Minister Antonio Leitao Amaro informed reporters that the government's plan incorporates 60 proposals from electoral programs of other parties.

"It is a government programme for change, but based on dialogue. The government is completely committed to the goal of budgetary responsibility," he said.

With only 80 seats in the 230-seat legislature, the AD will require the backing of either the far-right Chega party, which increased its parliamentary representation to 50 lawmakers, or the centre-left Socialists, who secured 78 seats, to push through legislation.