Chega accuses Socialists of irresponsibility ahead of State Budget delivery
Portugal's State Budget proposal for 2027 will be delivered to the Assembly of the Republic on Friday, 9 October, with its passage already effectively secured through a planned abstention by the Socialist Party (PS). The right-wing Chega party has accused the PS of irresponsibility for committing to abstain before seeing the full document, while the Liberal Initiative warns the budget lacks reforms and investment.
The budget comes at a difficult economic juncture. The Plano de Recuperação e Resiliência (PRR) — Portugal's pandemic recovery fund package — ends its execution period on 31 August 2026, removing between 0.6% and 0.7% from GDP growth that those funds contributed. The International Monetary Fund projects just 1.6% growth for Portugal in 2027, while the European Commission forecasts 1.8% — both well below the government's 2% growth projection.
Key figures emerging before Friday's delivery
Pedro Pinto, Chega's parliamentary leader, revealed after meeting with government ministers that the budget projects a budget surplus of 0.2% of GDP for 2027. The government's economic forecasts, shared with party negotiators, include growth "in the line of what has happened in recent years."
Eurico Brilhante Dias, the PS parliamentary leader, stated that the government estimates average inflation for 2027 will be "practically identical" to 2026. Recent months have seen year-on-year inflation between 3% and 3.4%, according to Brilhante Dias. The Conselho das Finanças Públicas, Portugal's independent fiscal council, estimates 3.2% inflation for 2026, driven partly by fuel price increases linked to the conflict in the Middle East.
Finance Ministry figures show debt interest payments rising by €776M in 2027 to roughly €7.1 billion — the highest level in a decade, representing 2.1% of GDP compared with 1.9% in 2026.
Social support and spending pressures
Prime Minister Luís Montenegro announced on Thursday that the Complemento Solidário para Idosos, a monthly cash support for low-income elderly and disability pensioners, will rise by €50 in 2027 to a reference value of €720. The current level stands at €670. The government programme targets €870 by 2029.
Government data shows the number of beneficiaries receiving more than €200 per month through this support jumped from 45,000 in April 2024 to 132,000 in June 2026 — an additional 87,000 people covered.
Why the Socialists will abstain
PS secretary-general José Luís Carneiro announced on 30 September he would propose to party organs that they abstain on the budget vote. The decision follows guarantees from Montenegro that Carneiro described as "a very positive signal" in response to socialist concerns, including:
• Advancing constitutional revision
• Protecting current and future pensions
• Financing investments delayed by PRR execution
• Supporting regions and municipalities affected by recent storms
If approved by party bodies, the abstention ensures the budget passes regardless of how other parties vote.
Criticism from opposition benches
Chega's leader Pedro Pinto criticised the PS for committing to abstain without having seen the full budget proposal. "This week we learned it was enabled," said João Cotrim de Figueiredo of the Liberal Initiative, commenting on the PS decision. "But will we have a quiet year? I don't know."
Cotrim Figueiredo warned that nearly €5 billion in spending is already committed — eaten up by pensions, public sector wages, social security and rising debt interest payments. Portugal's ceiling under the new EU Stability and Growth Pact, revised in 2024, is approximately 3.4% net spending growth, which translates to roughly €5 billion.
"One more budget without reforms, one more budget without investment," he said. "It's Portugal marking time."
End of EU recovery funds looms
The PRR's conclusion represents a structural shift for Portuguese public investment. The Banco de Portugal forecasts public investment growth slowing from 4.3% in 2026 to just 1.1% in 2027. Sectors most exposed include hospital modernisation, public housing, school construction, metro expansions in Lisboa and Porto, energy transition projects and digital infrastructure.
The government has approved a €200M financing line in the budget to complete PRR-related works still in progress after the August deadline, with a new deadline of 31 December 2027.
What this means for residents
For pensioners on low incomes, the CSI increase means roughly an extra €50 per month from 2027 — worth about two weeks of electricity bills for a typical household, or a week's worth of groceries for one person.
The last-minute nature of the budget's delivery on Friday means many details will only become clear when the full document reaches parliament. The contrast between the government's optimistic 2% growth forecast and the more cautious projections of the IMF (1.6%) and the CFP (1.6%) suggests the coming year may test whether Portugal can sustain its current pace without the cushion of EU recovery funds.
