Fitch forecasts a deficit of around 0.7% of GDP in 2026, compared to the Government’s projection of a surplus of 0.1%, but told Lusa it believes in the “strong commitment to budgetary prudence”.
In the financial rating agency’s view, “the increased capture of loans from the Recovery and Resilience Plan (PRR), additional tax cuts and increased public investment will boost the budget deficit”, according to statements by analyst Utku Bora Geyikci.
Still, the analyst highlighted that “even with a deficit of 0.7%, Fitch sees a strong commitment to budgetary prudence, with the deficit well below the median expected for the A rating, of around 3%, in 2026”.
Achieving a surplus would require “stronger revenue performance and/or tighter expenditure control than in the base case, or a more favorable macroeconomic environment.”
In September, Fitch raised Portugal’s rating from A- to A, with a stable outlook.
This decision was based “on medium-term credit fundamentals and the political framework, not on an annual result”, highlighted the analyst, meaning that “a clear consolidation plan offers directional support, but reinforcement depends on effective implementation and sustained delivery that meets or exceeds the assumptions”, he explained.
The Government delivered OE2026 to parliament, which predicts that the Gross Domestic Product (GDP) will grow 2% this year and 2.3% in 2026.
The executive intends to achieve surpluses of 0.3% of GDP in 2025 and 0.1% in 2026. As for the debt ratio, it estimates a reduction to 90.2% of GDP in 2025 and 87.8% in 2026.