"The fiscal situation has improved considerably since the pandemic, and Portugal is on a good track regarding public finances," Era Dabla-Norris, Deputy Director of the IMF's Public Finance Department, said at a press conference.

In its Fiscal Monitor, the IMF projects a surplus of 0.2% this year and a zero balance for 2026. However, most institutions that monitor the Portuguese economy predict a deficit.

When asked about this forecast for 2026, she emphasised that the State Budget for 2026 (OE2026) "points to a balance close to equilibrium."

"In Portugal, the 2026 State Budget was presented to parliament on October 10th and is expected to be approved with broad political support," she said, adding that the forecast for a 0.1% surplus in 2026 is "supported by a very strong primary balance, which reinforces Portugal's commitment to sound public finances."

The economist also noted that Portuguese public debt "peaked during the pandemic and is on a consistent downward trajectory," and is expected to fall to less than 90% of GDP by the end of next year and continue to decline in the medium term.

The government submitted the 2026 State Budget to Parliament, which forecasts Gross Domestic Product (GDP) growth of 2% this year and 2.3% in 2026.

The government aims to achieve surpluses of 0.3% of GDP in 2025 and 0.1% in 2026. Regarding the debt ratio, it estimates a reduction to 90.2% of GDP in 2025 and 87.8% in 2026.

The IMF, in its projections released this week, forecasts growth of 1.9% in 2025 and 2.1% in 2026.