Portugal’s parliament has approved the 2025 budget bill, promising to boost economic growth and generate a small surplus despite tax cuts and hikes in wages and pensions. The bill was passed with 80 votes, but the Socialist Party abstained, citing a desire to avoid a fresh political crisis.
The budget, supported by the minority government, aims to stimulate economic growth to 2.1% in 2025, with a surplus of 0.3% of GDP. Young people will have a total exemption from paying personal income tax, and the general corporate tax will be reduced to 20% from 21%.
The budget also includes salary hikes for public servants, ranging from 2.15% to 6.9%, and a 3.9% increase in pensions, above the estimated 2025 inflation rate of 2.3%.
The Social Democrats, who are part of the government, are facing criticism from the opposition party, Chega, who accuse them of being “the crutch” of the government and not caring about the fight against corruption. The leader of the Social Democrats, Alexandra Leitão, has called on the government to “put an end to excuses, diversionary maneuvers, and victimization”.