Portugal's Forward-Looking Fiscal Path: Budget 2026 Insights

Portugal's minority government revealed its 2026 budget, predicting 2.3% economic growth and a modest surplus. With tax cuts in place, the aim is to enhance household income and business competitiveness. The budget also seeks to lower the public debt ratio and offers tax incentives for young homebuyers.

Portugal's centre-right minority government presented its 2026 budget bill on Thursday, projecting a steady economic growth rate of 2.3% and a modest surplus, despite implementing new tax cuts for corporations and lower-income families.

The financial plan anticipates a budget surplus equal to 0.1% of the GDP, showing Portugal's commitment to maintaining fiscal responsibility, which stands out in the euro zone post-debt crisis.

The public debt is expected to decrease to 87.8% of GDP by 2026. Measures to boost disposable income, such as tax cuts for middle-income earners and young buyers' incentives, are included, alongside a gradual corporate tax reduction to 17% by 2028 to ignite business growth.

(With inputs from agencies.)