Lisbon, March 11, 2026 (Lusa) - Fitch expects Portugal's budget deficit to be 0.8% of GDP this year, mainly due to support measures to address damage from bad weather, with uncertainty remaining about the impact of the conflict in the Middle East.
In a webinar on Portugal's outlook held on Wednesday, Utku Bora, associate director of sovereign ratings at Fitch, noted that the credit rating agency anticipates small deficits this year and next.
For this year, Fitch forecasts a deficit of 0.8% of gross domestic product (GDP), mainly due to expenditure on storms, which is considered a one-off, i.e. an expense that only occurs due to an unexpected event.
The analyst pointed out that there is still some uncertainty about the total impact of the bad weather, as well as oil prices and the effects this may have.
The government has already announced measures, such as a discount on fuel tax due to higher fuel prices, but the impact will depend on how long prices remain high.
"There is a delicate balance, and everything depends on the evolution of oil prices and the impact of the storm," said the analyst, noting that there may have to be a choice between dealing with inflation and the budget balance, depending on the government's perspective.
In addition, the higher use of loans from the Recovery and Resilience Plan "also adds pressure" to public accounts, he said.
Still, the analyst pointed out that Portugal achieved surpluses in 2023 and 2024, and in 2025 a higher-than-expected positive balance is expected, particularly thanks to tax revenue.
Utku Bora also pointed out that, despite several elections in recent years, governments "have maintained fiscal prudence and prioritised consolidation".
On 6 March, the credit rating agency Fitch maintained Portugal's debt rating at “A” and upgraded the outlook to positive.
Fitch indicated that the outlook revision reflects the agency's view that Portugal's public debt-to-GDP ratio will continue to fall significantly over the forecast horizon (2026-2029), supported by "prudent fiscal policy, with deficits remaining well below the median of the peer group".
MES/ADB // ADB.
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