1. Presidential Bid 2026
Admiral Henrique Gouveia e Melo is emerging as the frontrunner in the January 2026 Presidential elections in Portugal, with widespread expectations of his candidacy and potential victory. Born in Mozambique, the 64 year-old first gained national prominence as the coordinator of the highly successful COVID-19 vaccination campaign. Since then, his name has consistently topped opinion polls as a favourite for the Presidency of the Republic.
Speculation surrounding his political ambitions reached new heights when Gouveia e Melo announced plans to step down as Chief of the Navy Staff, which is a move he finalised two weeks ago. According to reports by SIC, the former naval chief is expected to announce his candidacy in March 2025.
2. Mayor of Lisbon
The upcoming local elections are scheduled for September or October for the 2025-2029 term, where the public will elect municipal assemblies for Portugal's municipalities, members of the parish assemblies and elect council members and mayors. These elections are poignant as approximately 100 municipalities will see a change in leadership, with mayors unable to run again due to the three-term consecutive limit. The elections will highlight the power between the ruling parties and the Socialist Party (PS), which currently dominates at the local level. The PS has yet to announce their candidate for Mayor of Lisbon, however, it may likely come down to two women: former Minister of the Presidency, Mariana Vieira da Silva and former Minister of Public Administration Alexandra Leitão.
3. Economic Growth
According to national and international institutions, the Portuguese economy is expected to grow at a faster pace this year. In 2023, there was a 2.5% expansion in Gross Domestic Product (GDP), where the growth slowed to an average of 1.7% in 2024. However, 2025 suggests a rebound. The Ministry of Finance anticipates a 2.1% growth, however, the European Commission predicts 1.9% and the OECD predicts 2%. On an even more positive note, the Bank of Portugal foresees a 2.2% growth, whilst the IMF predicts 2.3% and the Public Finance Council 2.4%. Growth in the sale of goods and services abroad is forecast at 3.2% in 2025, with private consumption projected to rise by 2.7% and investment by 5.4%, according to the Bank of Portugal's December Economic Bulletin.
4. The 2026 State Budget
Pedro Nuno Santos, the Socialist Party leader, has indicated that in 2025 he will not negotiate the 2026 State Budget. It is unlikely that the 2026 State Budget will pass without the Socialists' support. By 9 September 2025, the President will no longer be able to dissolve the Assembly, as this date falls within six months of the end of his term (Presidential elections will be held in January 2026). As a result, for most—if not all—of 2026, Portugal will operate under the 2025 State Budget. The country would enter the “duodécimos” regime, a provisional financial arrangement allowing the government to spend one-twelfth of the previous year’s budget each month. It is only after mid-July 2026 that Parliament could be dissolved, legislative elections called, and a new State Budget negotiated.
5. Housing Prices
According to Eurostat, housing prices have already increased by 7.8% in the second quarter of 2024 compared to the same period in the year prior. This growth in housing prices is said to be driven by the decline in interest rates on housing loans, exemptions from IMT and IS for first-time young buyers, greater purchasing power and savings as well as the introduction of a public guarantee for housing loans for people under 35. Mário Centeno, the Governor of the Bank of Portugal, stated that demand-side measures, whether through tax reductions or credit facilitation, will worsen the problem of housing shortages. Similarly, Paulo Macedo, CEO of Caixa Geral de Depósitos, acknowledged that housing prices will likely continue to rise in 2025 because the supply of houses is insufficient to meet the growing demand.
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Source: https://www.theportugalnews.com/news/2025-01-09/what-to-expect-of-2025-in-portugal/94718
