Lisbon, May 22, 2025 (Lusa) - The Portuguese Minister of Finance, Joaquim Miranda Sarmento, has stressed that the Government remains confident that the economy will grow above 2% in 2025 and that it will maintain a surplus in 2026, despite the European Commission's contrary forecasts.
"[The estimate of 2.4%] is not ruled out, but it is more demanding. In any case, the figures we have point to growth above 2% with all the uncertainty that exists, recession in the US, very high tariffs, that is, several factors of uncertainty," Miranda Sarmento stressed in the ’Grande Entrevista" on state broadcaster RTP3 on Wednesday evening, conducted by journalist Vítor Gonçalves.
The minister, who did not commit to a specific figure, said that the European Commission had revised downwards its growth forecasts for all countries, as it did not know the effect of international uncertainty and the tariffs imposed by the United States.
The European Commission estimated that Portugal will achieve a budget surplus of 0.1% of Gross Domestic Product (GDP) this year, which will turn into a deficit of 0.6% in 2026, according to spring economic forecasts released on Monday.
These projections represent a downward revision from November's forecasts, when Brussels predicted a surplus of 0.4% this year, and are also more pessimistic than the estimates included in the State Budget for 2025 (OE2025).
At the same time, the EU executive has revised downwards its forecasts for Portuguese economic growth this year to 1.8%, but is now confident that gross domestic product (GDP) will grow by 2.2% in 2026.
For Miranda Sarmento, between the "recovery in consumption, positive tourism figures, the acceleration of private investment with major projects approved in recent times and the acceleration of the PRR [Recovery and Resilience Plan], there are conditions for the economy to grow above 2%" in 2025.
Regarding the budget surplus, the minister of finance stressed that the government continues to forecast a surplus for 2025 and 2026, noting that for 2026 "it is more demanding".
"For 2026, on the one hand, we have uncertainty from an international perspective and a more demanding budgetary exercise, as I have always said, due to the one-off effect of €3 billion in PRR loans," he pointed out, recalling that this is expenditure without revenue.
Asked about Portugal's increase in defence spending, Miranda Sarmento stressed that a NATO summit will be held in June, where decisions will be taken, pointing to Portugal's current commitment to reach 2% of GDP in 2029.
Last week, the NATO secretary-general estimated that all member states could be spending 2% of their GDP on defence before the next leaders' summit, adding that he was "eagerly awaiting" the outcome of the legislative elections in Portugal.
"It may have to be brought forward, there is naturally pressure and we will try to accommodate this within the budgetary margins," the Portuguese finance minister admitted during the interview.
"It is important to understand that, on the one hand, defence spending can have an effect on the economy to help the reindustrialisation of Portugal and Europe. Portugal can play a role in some areas, such as the naval or aerospace industries. If we invest, we can have an impact on our economy,‘ he added.
Leaving aside the 5% of GDP spent on defence, which he considers "unfeasible for any European country except Poland", which is already close to that figure, Miranda Sarmento stressed that the international situation "places greater demands" but argued that any target "cannot jeopardise the welfare state".
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