The government has set a fiscal consolidation target, aiming to gradually reduce the public budget deficit from 8% of GDP in 2024 to 2.6% by 2028. This path is outlined in the Medium-Term Fiscal Scenario (CFMP), approved by the Council of Ministers on June 24 and released this Thursday (3rd).
According to the document, a notable improvement is expected as early as 2025, with the deficit falling to 5.6% of GDP, supported by the gradual recovery of domestic revenues and enhanced fiscal discipline. The projections for the following years foresee deficits of 3.2% in 2026, 3.4% in 2027, and 2.6% in 2028.
The government foresees a consolidation path driven by structural reforms, greater tax collection efficiency, spending rationalization, and careful selection of public investments. Tax revenue is expected to grow by an average of 0.2 percentage points of GDP per year between 2026–28, fueled by improvements in tax administration and the resumption of economic activity.
Although gas revenue is still modest—estimated at around 0.3% of GDP—the government anticipates that the combination of economic growth and spending control will help stabilize public debt. Debt is projected to fall from 75.2% of GDP in 2025 to around 70% in 2028. However, the CFMP includes two alternative scenarios: an optimistic one, with debt falling to 58.3% of GDP, and a pessimistic one, with debt rising to 76.7%.
On the expenditure side, the document notes that spending will be optimized, with constraints on current spending and prioritization of infrastructure and social programs to maximize inclusive growth and reduce inequalities. Total expenditure is expected to drop from 75.2% of GDP in 2025 to 70.1% in 2028.
Macroeconomic projections forecast real GDP growth of 2.9% in 2025, accelerating to 3.7% in 2026, 4.5% in 2027, and reaching 5% in 2028. The core goal of the plan is to ensure fiscal sustainability, macroeconomic stability, and fiscal space to fund the priorities of the Government’s Five-Year Program (2025–29).
Source: Lusa
