Portugal’s 2025 Budget: A Balancing Act of Growth, Taxes, and Surplus

Portugal's parliament approved the 2025 budget, focusing on economic growth and a budget surplus despite tax cuts and increased wages. The Socialist Party abstained to avoid political crisis, facilitating the budget's passage. The budget aims for a 0.3% surplus, despite tax reductions and increased public spending.

Portugal's parliament passed the 2025 budget bill on Friday, marking a significant step for the centre-right minority government. Despite offering tax cuts for youths and businesses, alongside wage and pension increases, the bill forecasts a small surplus and economic growth.

The Socialist Party abstained from the vote to prevent a political crisis, allowing the budget to pass. The decision avoided a potential third snap election in three years, providing relief to the government amid political tensions.

Chega and other parties opposed the budget, criticizing salary increases for politicians and accusing the government of collusion with the Socialists. The budget includes measures to achieve a 0.3% GDP surplus while accommodating tax exemptions and salary hikes.

(With inputs from agencies.)