The Portuguese economy is expected to grow by more than 2% in 2027, surpassing the OECD's 1% estimate for the Eurozone. This robust growth scenario, following an increase of over 2% in GDP in 2026 despite geopolitical challenges and national constraints such as the storms in the first quarter, maintains the unemployment rate at historic lows, projected at 5.7% (down from the previous 5.8%). Inflation is expected to settle at 2.3%.
The Government is reinforcing its commitment to fiscal consolidation, aiming to reduce the country's debt and increase its resilience to external shocks. The State Budget proposal for 2027 projects a decrease in the public debt-to-GDP ratio by three percentage points, reaching 84.5%. This indicator had already fallen below 90% in 2025, the first year in 16 to achieve this milestone.
The Minister of State and Finance, Joaquim Miranda Sarmento, attributed this decrease to the "work of families and businesses in recent years," emphasizing the need to "maintain a slight surplus in public accounts and a sustained pace of public debt reduction" to avoid interrupting the path of fiscal consolidation.
In budgetary terms, 2027 is expected to mark the fifth consecutive budget surplus in Democracy, with a projected balance of 0.1%. For 2026, a zero or slight surplus is estimated, achieved despite support provided due to storm “Kristin” and the conflict in Iran, as well as extraordinary reductions in Personal Income Tax (IRS) and supplements for pensioners.
These positive results from the last three years are preparing Portugal to face new challenges, demonstrating the ability to support current generations without compromising the future, through fiscal balance.
