Parliament passes the 2025 budget, which is good news for Portugal’s minority government

The center-right minority government of Portugal’s 2025 budget bill was finally approved by the country’s parliament on Friday. The bill is expected to boost growth and create a small surplus, even though it includes tax cuts for young people and businesses and higher pay and pensions.

The coalition that backs the government only got 80 votes in favor of the bill. This is because the Socialist Party, which has 78 seats in parliament, did not vote, just like it did in the first reading of the bill.

There were 72 lawmakers who voted against, including some from the far-right Chega party.

The vote is good news for the minority government because many experts thought it would have a hard time staying in power after taking over in April. This makes a third early election in as many years more likely.
Alex Leitão, the leader of the Socialists in parliament, said that her party’s decision to not vote on the budget was only to avoid a new political problem.

She said that the government should stop making excuses, using distractions, and acting like a victim. She was talking about the government’s claims that the opposition was stopping it from passing laws.

Chega’s head, Andre Ventura, said that the Socialists were now “the crutch” of the government run by the Social Democrats. He said that both parties were working together and “didn’t care about the fight against corruption.”

Before the vote, Chega put up posters on the front of the parliament building calling it “shameful” that the budget included a pay raise for politicians.

The protest is about undoing a 5% pay cut that was put in place in 2010, a year before Portugal got a bailout. After that, the president of parliament ordered the flags to be taken down.

The budget thinks that the economy will grow a little faster in 2025, to 2.1%.

The government wants to have a balance of 0.3% of GDP next year, even though most young people won’t have to pay any personal income tax and the general company tax will go down from 21% to 20%.

Infrastructure Minister Miguel Pinto Luz said that “the need to keep the public accounts balance and public debt on a downward path” limits the amount of extra fiscal support that can be used.

Salaries for government workers will go up by 2.15 to 6.9 percent next year, and pensions will go up by about 3.9 percent. This is more than the 2.3% inflation that is expected in 2025.