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2026-05-22 21:10:32
[Storms Devastate Fiscals, Portugal's Budget Balance "Extremely Difficult"] ⑴ Portuguese Economy Minister Manuel Castro Almeida said on Friday that achieving a balanced budget this year will be "extremely difficult" due to the €2 billion (approximately US$2.3 billion) in losses caused by storms in January and February, equivalent to 0.6% of GDP. ⑵ Three weeks ago, the government had projected a balanced budget (no deficit or surplus) this year, compared to a previous forecast of a small surplus of 0.1%, lower than the 0.3% projected in 2025. The Economy Minister told parliament that the government has not abandoned its goal of a balanced budget, but achieving this goal will be extremely difficult after suffering €2 billion in storm losses. ⑶ Severe storms and floods struck the heart of Portugal's economy in the central region, causing widespread damage to businesses, homes, and infrastructure, leading to increased public spending and tax revenue losses. However, the Economy Minister stated that Portugal's good international reputation, fiscal discipline (debt below 90% of GDP), and plans to cut corporate taxes continue to support foreign investment. (4) High energy prices related to the storm and the conflict with Iran caused the economy to stagnate in the first quarter, but the government expects the economy to grow by 2% this year, slightly higher than the 1.9% growth in 2025.
