Portugal State Budget 2027 focuses on fiscal stability and tax relief

Portugal's 2027 State Budget proposal focuses on fiscal stability, tax relief, and social support. The budget anticipates a 0.1% GDP surplus and a reduction in public debt to 84.5% of GDP, with projected economic growth of 2.1% in 2027. Key measures include an IRS tax reduction impacting approximately 552 million euros, a minimum wage increase to 970 euros, and adjustments to the Senior Solidarity Complement.

The Socialist Party (PS) is expected to abstain, providing the political stability necessary for the minority government to proceed. However, economic forecasts vary; while the government predicts 2.1% growth for 2027, the International Monetary Fund (IMF) offers a more conservative estimate of 1.9%, alongside higher inflation projections of 3% for that year.

Reaction to the budget has been mixed. The Association of Police Professionals (ASPP/PSP) warned that the proposed 2.3% salary update may not recover purchasing power lost in 2026 due to inflation, calling for safeguard clauses. Meanwhile, analysts note that while the budget maintains public account equilibrium, the focus on avoiding political drama may limit broader structural reforms.