State Budget balance more than in 2025 says Finances minister

Portugal’s government has issued good news over State and public finances regarding the surplus from 2025 details of which will be issued formally tomorrow.

(The budget balance) will be far above what the entities’ forecasts were and what our forecasts were”, announced the Minister of Finance, Joaquim Miranda Sarmento, at a Banco Português de Fomento conference held on Tuesday.

The Government anticipated a budget surplus of 0.3% for 2025. However, despite a more positive carry-over effect than anticipated, Sarmento said that the first months of 2026 were “absolutely unexpected” and will have an impact on forecasts for this year. “We cannot be complacent, despite the success of recent years”, he warned.

For now, the Government is not making new forecasts for economic growth, referring to those presented in the State Budget which pointed to GDP growth exceeding 2%. However, Miranda Sarmento recalled that this number “does not include the estimated impact of the storms or complications with the war in Iran”.

Leaving the details for tomorrow, the Minister of Finances painted a very optimistic portrait of the Portuguese economy, highlighting indicators such as the low unemployment rate, economic growth and the acceleration of family income – which has been reflected in a high savings rate.

“This all reinforces the resilience of our economy and then the banking sector, which today is a success story, with capitalised and profitable banks”, indicates Miranda Sarmento.

However, the Minister responsible for Finance points the finger at what he says is a chronic problem in the Portuguese economy: low productivity. And, to resolve it, he suggests three major solutions.

“We need more human capital, with different levels of qualification and for each sector of the economy and government. We need to substantially reduce bureaucracy and contextual costs and we also need to improve labour legislation”, he says, at a time when negotiations between the Government, employers and UGT are “not yet concluded”.

Source: Negócios; Credits: MIGUEL A. LOPES/LUSA
Copyright: © 2026 LUSA – Agência de Notícias de Portugal, S.A.