Portugal is champion in terms of surpluses but mediocre on growth

Portugal is one of only three countries in the Euro Zone expecting surpluses at the end of this year according to Brussels.

However, when it comes to growth, it is further down the ranking and behind neighbouring Spain.

Portugal is one of the few countries in the Euro Zone that expects a budget surplus this year and next. However, if good financial bookkeeping places it at the top of the table, the same cannot be said of its economic growth, with rates below southern European countries such as Spain and Greece.

In 2023, the country achieved the largest budget surplus in the history of Portuguese democracy: 1.2% of Gross Domestic Product (GDP).

Months later, with a new government at the helm, priorities have changed slightly and the expression “balanced books” has given way to a new mantra: the “virtuous balance”. The goal remains – to have a positive balance, but smaller.

It is between these goal posts that Portugal’s Minister of Finance, Joaquim Miranda Sarmento, sees the country’s public accounts strategy, as he has argued: “The country does not need or can stand very high budget surpluses.”

The Finances minister is working towards on a balance of 0.4% this year (although organisations such as the Public Finance Council say it is an underestimate and point to 0.7% and 0.3% in 2025.

Portugal is one of the three countries that predicts positive budget balances. Leading the table in 2024 is Ireland (4.5%), followed by Cyprus (3.9%). In 2025, the order reverses and Cyprus’ estimates a surplus of 2.7% (the highest), with the Irish pointing to 1.7%. Portugal retains third place in both years.

Portugal is enjoying the sixth highest GDP increase this year: 1.8%. Leading the ranking are Malta (4.9%), Cyprus (3.7%), Spain (2.7%), Slovakia (2.3%) and Greece (2.2%). On the opposite side are Estonia, with a contraction of 1%, and Finland and Ireland (both with 0.2%), followed by Germany (0.3%) and Spain (0.6%).

According to the budget plans, in 2025, Portugal moves to the middle of the growth table, with an increase of 2.1%, below the 2.4% expected by neighbouring Spain and the 2.3% of Greece.

Malta continues to register the highest rate (4.3%), followed by Ireland (3.9%), Cyprus (3.1%) and Latvia (2.9%), while Germany (1%), France (1.1%), Italy (1.2%) and the Netherlands (1.5%) are the lowest. In terms of percentage change, Ireland makes the biggest jump – 4.1 points , while Malta makes the biggest jump