Portugal: Elections in an encouraging economic context

Early legislative elections will be held on March 10, 2024, following the resignation of Socialist Prime Minister António Costa in November 2023. The latest polls suggest a close race between the Socialist Party (PS) and the right-wing opposition coalition, as well as a breakthrough for the far-right . No party is likely to obtain an absolute majority, making it necessary to form coalitions. After years of austerity following the financial crisis, Portugal has returned to growth. GDP growth has consistently outpaced that of the eurozone, inflation is approaching 2%, the labor market is strong, and public finances have undergone significant consolidation. In this context, the spread with German bonds continues to narrow. The election will be closely watched beyond the country's borders, as it is expected to provide indications of how the Portuguese will vote in the European elections, which will take place only three months after this election.