Leiria, Portugal, May 21, 2026 (Lusa) - Portugal's prime minister, Luís Montenegro, downplayed the European Commission's latest economic forecasts, which project a 0.1% budget deficit for Portugal in 2026, saying that the country's public authorities are strong enough to counteract the prediction.
"We have a public administration structure that is sufficiently strong and robust so that, even in this difficult context, we can counter this forecast," he said during his speech at the opening of the Hospital CUF Leiria.
He said that there is no reason to dramatise the situation.
“On the contrary, there is reason to be aware, to have a sense of responsibility and prudence, but at the same time a great deal of confidence,” he added.
He noted that the European Commission’s economic forecasts anticipated a slight deterioration in Portugal's economic and financial outlook, placing the economic growth rate marginally below initial expectations.
He explained that due to the impact of Storm Kristin and broader international uncertainty, the European Commission believed Portugal could end 2026 with a deficit of 0.1%.
Asserting that his government kept its feet firmly on the ground, he highlighted the vitality and resilience of public, private, and social sector institutions, alongside local authorities and entrepreneurial capacity, as well as the community's resilience.
“I had anticipated that 2026 would be more difficult than we had expected. But I want to tell you that I am confident that in 2026, what happened in 2025 and what happened in 2024 will happen again: even with these forecasts, we will reach the end of 2026, and we will overcome a financial year that is legitimately and normally characterised by anticipation of what has not yet happened,” he said.
The government has no obsession with the country’s budget surplus, and it is not obliged to achieve a result that leads to a budget surplus at the end of 2026, he added.
The European Commission is more pessimistic than the government and forecasts that Portugal will move from a surplus to a deficit of 0.1% of GDP (Gross Domestic Product) in 2026, due to the impact of post-storm support measures and tax cuts.
According to the spring economic forecasts released on Thursday, Brussels forecasts a deficit of 0.1% of GDP in 2026 and 0.4% in 2027, assuming current policies remain in place, while the government projects a balanced budget in 2026.
In 2026, the projected decline reflects the impact of government support measures taken in response to the series of storms in January and February, the EU executive explained.
EYC/MYAL // ADB.
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