Portugal is a relatively small and poor country on Europe's periphery. Its revolution of 1974 overthrew dictatorship and opened the path to integration with Europe.
Portuguese politics has been characterised by pragmatic consensus between the two main parties, the centre-right Social Democratic Party (PSD) and the centre-left Socialist Party (PS). Since 2016 the economy has grown by an annual average of 2.2% per year, thanks to booming exports and a newfound commitment to fiscal responsibility shared by both parties.
The country held its third election in barely three years in May 2025. The previous Socialist prime minister, Antonio Costa, resigned less than two years after winning an election when prosecutors raided his official residence, finding €76,000 in the office of his chief of staff and arresting five people in what they said was an influence-peddling scandal. No charges were brought and there was no evidence of wrongdoing by Costa, who was later chosen as president of the European Council.
Luis Montenegro, a lawyer from a small town near Porto, became centre-right prime minister but called and lost a confidence motion in parliament following revelations that Spinumviva, his family's consulting firm, had received fees from companies doing business with the government.
Chega ("Enough!"), a fast-growing hard-right party led by Andre Ventura, a demagogic lawyer and former football pundit, won 18% of the vote and 50 seats in the 2024 election, up from just 1.4% and one seat in 2019. Ventura exploited discontent over a swift rise in immigration and the holes that years of austerity had burrowed into the welfare state.
The president is Marcelo Rebelo de Sousa. Liberal Initiative is a small classically liberal party.
The Economist named Portugal its "economy of the year" for 2025 (after Spain in 2024 and Greece in 2022 and 2023). Portugal combined strong GDP growth comfortably above the European average, low inflation and a buoyant stockmarket, with the latter rising by more than 20% in 2025. Tourism has boomed and rich foreigners have been moving to the country to take advantage of its low tax rates.
The main domestic issues are health care, a housing shortage and taxes. Growth dipped in the first quarter of 2025.
In April 2026 Portugal became the first government in the euro area to sell a "dim sum" bond (a yuan-denominated bond issued in Hong Kong), raising almost 2bn yuan.
bozone, n.: The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.