Portugal’s minority government has announced that it will finalize its 2025 budget proposal after ongoing negotiations with the opposition Socialist Party. The budget has been “pre-approved” following a cabinet meeting in Lisbon on Monday, Bloomberg reports.
The statement follows recent progress in talks between the government and the Socialists, who hold the key to the budget’s passage in parliament. Socialist leader Pedro Nuno Santos, who met with Prime Minister Luis Montenegro last week, expressed optimism about the negotiations but suggested there is still room for improvement, particularly regarding the government’s proposed corporate tax cut.
The 2025 budget is a crucial test for Prime Minister Montenegro’s minority administration, formed after his center-right AD coalition narrowly won the election in April. Montenegro’s government requires support from other parties to pass budgets and legislation, potentially forcing compromises on key policies.
The Socialists, with just two fewer seats in parliament than the AD, have the power to allow the budget to pass by abstaining. An initial vote on the budget is scheduled for the end of October.
The government aims to achieve budget surpluses of around 0.2% to 0.3% of GDP over the next four years, and forecasts economic growth of about 2% in 2024 and 2025.
