Portugal’s socialist PM Antonio Costa wins surprise absolute majority in snap polls

Costa declared the results a ‘victory of humility, trust and for stability’. The last time the Socialists won an absolute majority in Portugal was in 2005

The snap election was called after Costa’s Socialists lost the budget support of Portugal’s Communists and the Left Bloc, which both lost seats on Sunday

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Portugal’s Prime Minister and Socialist Party Secretary General Antonio Costa speaks after winning Sunday’s general election. Photo: Reuters

Published: 11:27am, 31 Jan 2022

Socialist Prime Minister Antonio Costa won Portugal’s general election and will now have an absolute majority in parliament, meaning far-left parties are no longer needed to back his budgets.

Costa’s centre-left Socialists took about 42 per cent of the vote and increased the number of seats held in the 230-seat chamber to at least 117 from 108, based on 99 per cent of voting districts reporting, according to the government’s election results website. The last time the Socialists won an absolute majority in parliament was in 2005. The opposition centre-right PSD party garnered about 28 per cent of the vote.

Costa, 60, will oversee an economy that has trying to bounce back from the pandemic with the help of European Union recovery funds that began to flow last year. The government said in April that the EU pandemic recovery plan will have an economic impact of €22 billion (US$25 billion) in Portugal through 2025, and estimated that gross domestic product in 2025 will be 3.5 per cent higher than it would be without that plan.

Customers on the terrace of a near-deserted waterside bar in Lisbon earlier this month. Tourism represents about 15 per cent of Portugal’s economy. Photo: Bloomberg

Portugal’s €200 billion economy is recovering after shrinking 8.4 per cent in 2020 – the most since at least 1960 – as the pandemic hurt tourism and other key businesses. For Portugal, which has the third-highest debt ratio in the euro area behind Greece and Italy, tourism represents about 15 per cent of the economy and 9 per cent of employment.

In January 2021, Portugal had one of the world’s worst outbreaks, forcing the government to impose strict confinement measures. The country now has one of the highest Covid-19 vaccination rates in the world, and despite record cases in recent weeks, there has not been a surge in occupancy at intensive-care units. The government eased restrictions earlier this month.

The Bank of Portugal forecasts growth will accelerate to 5.8 per cent in 2022, before slowing to 3.1 per cent in 2023. Inflation is predicted at 1.8 per cent in 2022, subdued when compared with other European economies. Meanwhile, the government forecasts the debt ratio will drop to about 122 per cent of GDP at the end of 2022 from about 127 per cent in 2021, and aimed to narrow the budget deficit to 3.2 per cent of GDP in 2022.