The government's 2027 budget proposal projects the public debt-to-GDP ratio to fall to 87.5% in 2026 and 84.5% in 2027. Nominal GDP growth and the primary surplus are cited as the main drivers for the reduction, while interest spending and deficit-debt adjustments exert upward pressure.
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Portugal's public debt decreased to 88.4% of GDP in the third quarter of 2026, totaling 284.88 billion euros. This is the lowest debt-to-GDP ratio recorded since the end of 2009, representing a decline of 4.2 percentage points from the previous quarter.
The Minister of Finance stated that public debt reduction remains the government's top priority, projecting it to fall below 85% of GDP by 2027. The state budget proposal for 2027, already delivered to Parliament, forecasts 2.1% economic growth for 2027 and a 0.1% budget surplus.
Finance Minister Joaquim Miranda Sarmento stated that Portugal aims to reduce public debt to 84.5% of GDP in 2027, with a long-term goal of falling below Germany's debt level by 2031. He defended the state budget proposal for 2027, acknowledging a reduction in global public investment compared to the previous two years, while noting that investment levels remain above the average of the decade preceding 2025.