Portugal records 249.3 million euro budget surplus through August as NHS debt payments weigh

Budget surplus contraction

Portugal registered a public administration surplus of 249.3 million euros through August 2026, according to the monthly budget execution report published by the Entidade Orçamental on 30 September 2026. The figure represents a decrease of 1,799.4 million euros compared to the 2,048.7 million euros recorded during the same eight-month period in 2025. Total consolidated and primary public expenditures rose 10.4% year on year through August. Over the same timeline, public administration revenues increased by 7.9%, supported by performance gains across all components, although the rate of expenditure expansion outpaced revenue collection.

Impact of health sector debt regularisation

The contraction in the overall fiscal position stemmed from the central administration balance, which decreased by 2,864.5 million euros, or by 1,618.2 million euros when excluding debt regularisation payments. The overall and primary balance for the central administration stood at negative 845.8 million euros, reflecting a drop of 2,150.2 million euros. A central factor behind the shift was the acceleration of state capital injections to settle overdue debts accumulated by the National Health Service (SNS). Debt clearance transfers reached 1,426.5 million euros through August 2026, compared to 180.1 million euros allocated during the same period in 2025. The budget authority calculated the underlying balance without these extraordinary health transfers.

Adjusted for the effect inherent to the mentioned payments of the NHS, the overall public administration balance would be positive at 1,675.8 million euros, with a reduction of 553 million euros compared to 2025, due to the fact that the increase in spending was higher than that of revenue.

Regional accounts and tax exemptions

The decline in central government balances was partially offset by surpluses across other tiers of public administration. Social Security balances improved by 714.3 million euros, local administration accounts rose by 281.2 million euros, and regional administrations registered an increase of 69.6 million euros. In aggregate, regional and local administrations posted a joint surplus of 1,095.1 million euros through August, an increase of 350.8 million euros compared to the same period in 2025. On the fiscal and contributory revenue side, results were influenced by debt payment moratoria and exemptions from the single social tax (TSU) granted to support companies affected by a series of storms.

Overdue public payments exceed one billion euros

Overdue payments owed by public sector bodies climbed to 1,005.8 million euros by the end of August 2026, representing an increase of 294.2 million euros compared to the previous month. The Entidade Orçamental pointed out that a year-on-year comparison was not feasible because the formal definition of overdue payments underwent a revision in June 2026. The monthly expansion was concentrated in the health sector, which generated 226.5 million euros of the new arrears. Reclassified public entities contributed 32.3 million euros to the monthly rise, while regional administrations accounted for 26 million euros in additional delayed payments.