Finance: Economic policy news in Portugal

The Portuguese government confirmed that the national minimum wage (salário mínimo nacional) will increase by €50 to €970 per month in 2027. The increase fulfills an agreement signed under the social dialogue (Concertação Social) framework, though the Minister of Labour left open the possibility of future adjustments. Trade unions had pushed for a higher revision, but the target remains locked in the draft state budget report.

Liberal Initiative (Iniciativa Liberal or IL) leader Mariana Leitão stated that the middle class is currently under attack and ignored by the government. During a party event in Quarteira, Leitão accused the Socialist Party (Partido Socialista or PS) and the Social Democratic Party (Partido Social Democrata or PSD) of abandoning this demographic due to its perceived decline in electoral weight.

The government has approved a 33% windfall tax on the excess profits of oil companies, becoming the first of five European nations to implement such a measure after contacting Brussels. The Temporary Solidarity Contribution on the Oil Sector (Contribuição de Solidariedade Temporária sobre o Setor Petrolífero or CSTSP) will be calculated based on the average results from 2024 and 2025. This move targets extraordinary profits linked to recent global energy price increases.

Portugal has submitted a seventh request to the European Commission to reprogram its Recovery and Resilience Plan (Plano de Recuperação e Resiliência or PRR). The move follows a suggestion from Brussels to ensure the country meets its established milestones and avoids the potential return of funds.

The International Monetary Fund (Fundo Monetário Internacional or FMI) has recommended that Portugal increase labour market flexibility to boost productivity and encourage companies to offer more permanent contracts. The FMI suggests that making dismissals easier would incentivize businesses to move away from short-term hiring. This recommendation follows the recent parliamentary rejection of the government's own labour reform proposals.

Prime Minister Luís Montenegro stated that the government will respond with balance to the economic situation caused by the war in the Middle East. He emphasized that the administration is prepared to sacrifice budgetary results if necessary to address the crisis, noting that he has no obsession with maintaining surpluses. Montenegro warned against adopting superficial measures that fail to provide long-term solutions.

Finance Minister Joaquim Miranda Sarmento has joined counterparts from Germany, Italy, Spain, and Austria in a formal request to the European Commission for a new tax on extraordinary profits of energy companies. The ministers argue this measure would ensure unity and address the impact of rising fuel prices linked to the ongoing conflict in the Middle East. The proposal mirrors similar European regulations implemented during the 2022 energy crisis.

Update: Portugal joins five-nation push for energy windfall tax

Finance ministers from Portugal, Germany, Italy, Spain, and Austria sent a formal letter to European Commissioner for Climate Action Wopke Hoekstra on April 3. The group argues that energy companies benefiting from market volatility caused by the conflict in Iran should contribute to easing the financial burden on the public.

Bank of Portugal (Banco de Portugal) Governor Álvaro Santos Pereira stated that a retirement agreement with his predecessor, Mário Centeno, will save the institution €2.2 million in future salary and social security costs. The Governor emphasized that the pension will be paid by the bank's own pension fund and will not cost taxpayers anything. Tax-paying residents should note that the agreement settles the former Governor's status as he transitions out of his remaining consultant role.

Diário de Notícias reports Prime Minister Luís Montenegro told Parliament that small deficits caused by higher current spending and public investments under the PTRR (the Portugal Transformation, Recovery and Resilience plan) would still allow the government to claim 'balanced public finances.' His comment came during a biweekly parliamentary debate responding to a CDS deputy's questions about fiscal room. Taxpayers and residents should watch budget announcements as PTRR‑funded projects proceed and fiscal targets are tracked.