The International Monetary Fund (IMF) foresees that Portugal's budget balance will be zero this year, compared to the forecast of a deficit of 0.1% of GDP in April.
© Reuters
24/06/2026
by
Lusa
“ A budget position should be broadly balanced by 2026′′, projects the IMF in the report on the Article IV mission, stressing that the “impact of storm-related spending is estimated preliminary at around 0.3% of GDP”.
In addition to storm support, the Government also applied the discount on the ISP due to rising energy prices and other measures foreseen in the State Budget for 2026 (OE2026), which include, for example, new cuts in the IRS.
The IMF underlines that the OE2026 will help to cope with recent shocks, but warns that the expansionist attitude “may exacerbate inflationary pressures”.
The institution also considers that maintaining broadly balanced budgetary positions in the medium term, as the government projects, will require additional countervailing measures.
Taking into account the pressures of ageing burdens, the planned increases in defence spending to achieve NATO’s target of 3.5% of GDP by 2035 and the permanent impact of recent and planned tax reductions, the IMF team projects growing deficits from 2028, so “compensatory measures are needed to achieve the targets”.
The government, which was consulted on this Article IV mission, said, according to the report, to agree with many of the IMF’s budgetary policy recommendations, but “it trusts that balanced budgets can be achieved in the medium term without additional savings measures”.
The executive also projects a zero balance this year, forecast updated in April in the annual progress report sent to Brussels.