(Bloomberg) -- Portugal’s minority government said negotiations with the opposition Socialist Party about the 2025 budget have ended and that it expects the plan to pass in parliament.
The final budget proposal includes contributions from the Socialists and will be approved at a cabinet meeting on Wednesday, Prime Minister Luis Montenegro said on Tuesday night in an interview with television channel SIC. The only item on which the government didn’t reach an agreement with the biggest opposition party was about plans for corporate tax cuts after 2025, he said.
Montenegro said the Socialist Party has to announce how it will vote, and that he has “full conviction” the budget will pass in parliament.
The budget, due to be presented by Oct. 10, is a key test for Premier Montenegro’s minority administration, which took office in April after his center-right AD coalition’s narrow election win over the Socialists. The prime minister needs to find backing from other parties to get approval for budgets and other measures, and may have to compromise on key policies such as tax cuts to pass legislation.
Socialist leader Pedro Nuno Santos said on Friday night that his party was “on the path” to let the budget pass after holding talks with the prime minister. Santos said that his party had a “very positive” assessment of the government’s response to proposals made earlier by the opposition group, adding that there was still room for improvement.
The Socialists have just two fewer seats in parliament than the AD and can let the budget pass by abstaining. An initial vote on the budget is due to take place at the end of October.
The government aims to post budget surpluses of about 0.2% to 0.3% of gross domestic product in the next four years, and forecasts economic growth of about 2% in 2024 and 2025.
©2024 Bloomberg L.P.