Portugal’s Government, Opposition Continue Talks About Budget

(Bloomberg) -- Portugal’s minority government said it’s awaiting ongoing negotiations with the opposition Socialist Party before it presents a final proposal for the 2025 budget.

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The 2025 budget has been “pre-approved,” the government said in an emailed statement on Monday following a cabinet meeting in Lisbon.

Portugal’s biggest opposition party said on Friday that it’s “on the path” to let the government’s budget pass in parliament after making progress in the negotiations in recent weeks. Socialist leader Pedro Nuno Santos, who met the prime minister on Thursday, said there’s still room for improvement and suggested new alternatives to the government’s budget plans, which include a corporate tax cut.

The budget, due to be presented by Oct. 10, is a key test for Premier Luis Montenegro’s minority administration, which took office in April after his center-right AD coalition’s narrow election win over the Socialists. Montenegro needs to find backing from other parties to get approval for budgets and other measures, and may have to compromise on key policies such as tax cuts to pass legislation.

The Socialists have just two fewer seats in parliament than the AD and can let the budget pass by abstaining. An initial vote on the budget is due to take place at the end of October.

The government aims to post budget surpluses of about 0.2% to 0.3% of gross domestic product in the next four years, and forecasts economic growth of about 2% in 2024 and 2025.

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