Portugal's Stormy Path to Financial Stability

Portugal is in a tough spot. The country is trying to keep its budget balanced and reduce debt, but recent storms have made things harder. The finance minister, Joaquim Miranda Sarmento, said that helping people and businesses affected by the storms is a priority. This means that the government might not be able to cut costs as much as planned. The storms caused a lot of damage. Homes, factories, and infrastructure were hit hard. The government estimates that it will cost over 4 billion euros to fix everything. They have already set aside 2. 5 billion euros in loans and incentives to help with the rebuilding process. But this is a lot of money, and it could slow down Portugal's efforts to reduce its debt.Before the storms, Portugal was doing well. The economy was growing, and the government was running a budget surplus. This is rare for many countries in the euro zone. But now, the government expects the surplus to shrink. They also predict that the economy will grow by 2. 3% this year, which is a bit less than before. The finance minister also mentioned that 2026 will be a difficult year. This is because the government has to pay back 2. 5 billion euros in loans from the EU recovery funds. These loans are different from grants because they have to be paid back, which means less money for other things. Despite these challenges, Portugal is still working to reduce its public debt. The government expects the debt to drop to 87. 8% of GDP this year. This is a small improvement from last year's 90%. But with the storms and the loans, it's clear that Portugal has a lot on its plate.