Portugal's Budget Bill: A Dance Between Surplus and Concessions

Portugal's centre-right minority government is set to present its initial budget bill, aiming for a small surplus by 2025. Despite concessions to the opposition and adjustments undermining initial proposals, passing the bill remains uncertain, potentially resulting in a third snap election within three years.

Portugal's centre-right minority government is preparing to present its first budget bill on Thursday, focusing on a modest surplus by 2025. This ambition comes despite tax reductions and wage increments, alongside making concessions to the opposition to prevent a political deadlock.

Failure to pass the budget might lead to the government's collapse, prompting a possible third snap election in as many years. The government has altered its initial tax schemes and corporate tax rate proposals to align more closely with the preferences of the opposition Socialist Party, yet negotiations ended without a firm agreement.

Prime Minister Luis Montenegro expressed his confidence that the budget would pass within parliament, solely requiring the PS to abstain. Meanwhile, the government's economic growth projections remain at approximately 2% for 2024 and 2025, amidst public spending hikes and tax reductions.

(With inputs from agencies.)