CFP warns Portugal's 2027 budget may contain excess interest cost

The Conselho das Finanças Públicas examined the State Budget for 2027 that was submitted to Parliament on 8 October and found the forecasted interest outlay to be possibly inflated. According to the CFP, public spending as a proportion of GDP, stripped of the Recovery and Resilience Plan base effect, is expected to increase by 0.4 percentage points, reaching 42 % in 2027, largely because of higher interest obligations.

The council pointed out that the Ministry of Finance's projected interest cost is markedly higher than the estimate the CFP produced only weeks before, and also exceeds the figure presented in a government policy table. This gap suggests the interest variable may have been overestimated, creating potential fiscal slack if the underlying financial assumptions do not materialise, despite one outlet environment of rising rates. The CFP’s analysis was presented by its chair, Nazaré Costa Cabral, and references earlier work by Joaquim Miranda Sarmento.