April Budget Execution Registers a €1,547.7 Million Deficit on €1.13 Billion SNS Debt Settlement — March Surplus Reversed

Portugal’s budget execution summary for the first four months of 2026, released by the Entidade Orçamental on Friday 29 May, prints the central public accounts at a €1,547.7 million deficit through April — a €1,701.6 million swing from the same window in 2025 and a clean reversal of the surplus position posted at the end of March. The single line item driving the turn is the Serviço Nacional de Saúde arrears settlement booked in April: €1,134.3 million in regularised hospital debt that, stripped out, would have left the balance at a €413.4 million deficit instead.

Revenue Up 5.7%, Spending Up 10.5%

The mechanical read of the April tape is a familiar one for finance ministries that release the SNS regularisation in lumps: revenue grew 5.7% year on year, expenditure grew 10.5%, and the gap opened the deficit. Personnel costs rose 7% and acquisition of goods and services climbed 30.5% — the latter almost entirely the hospital-arrears line moving through the accounts. Outside the SNS settlement, the spending pattern is closer to flat in real terms.

On the receita side, the Jan-April tax tape lands at €17,652.1 million, equivalent to 26% of the full-year target written into the 2026 OE. Direct taxes are up 1.1% — IRS contributing +3.1% on the back of payroll growth, IRC down 20% as the rate-cut cycle and 2025 base effects bite. Indirect taxes nudged up 1.3%, with IVA at +0.7% and ISP up 2.8% even as the discount-at-the-pump scheme bleeds receipts. Social contributions did the heavy lifting at +7.6%, tracking the labour-market tightening the INE employment series confirmed on Friday.

Storm Kristin and the Side Pots

Buried in the appendix is the bill for the early-2026 weather episodes — €170.8 million in central-government Storm Kristin support to April, of which €75 million went to infrastructure repairs and €36.4 million to employment-maintenance measures. The remaining tranche is split across smaller line items in the CCDR and Civil Protection envelopes. The Storm Kristin file is the one Carlos Moedas flagged this week as having gone around the Câmara de Lisboa, but on the public-accounts side the disbursement is now appearing in the central read-out.

Overdue payments held by public entities tightened to €293 million at end-April, €210 million below the same point in 2025 — a clear signal that ministries are using the Q1 cash window to clear backlogged supplier invoices ahead of the summer disbursement cycle. The Central Administration balance fell €2,347 million (or €1,212.7 million ex-SNS), and the Regional Administration balance softened a further €137.4 million on Madeira and Açores spending.

What to Watch Next

• The May tape: the Jornal de Negócios preview puts the cumulative deficit at €2.5 billion through May, which would imply roughly €1 billion of additional gap in a single month if confirmed.
• CFP versus Mini-fin: the Conselho das Finanças Públicas has Portugal at a primary-spending growth rate that outruns the Government’s 2027-28 path. The April read makes the 0.1% IMF deficit forecast look optimistic.
• Bruxelas read-across: the European Commission’s May projection already flagged Portugal as re-entering a defiç-period in 2026. Friday’s execution data confirms the inflection point landed in April.
• SNS arrears tail: hospital-debt regularisation cadence remains the swing variable. If a second tranche lands in Q3, the headline deficit will widen again before the OE 2027 framing window.

The April figures do not yet write the year-end story — revenue base effects, the seasonal IRS reconciliation and a likely second SNS regularisation are all still ahead. But they do mark the moment the 2026 fiscal narrative pivoted: from a March surplus consistent with the 0.3% target floor written into the 2026 OE, to an April deficit that puts the EU’s revised projections, the IMF’s Article-IV write-up and the CFP’s spending-track warning in the same frame at the same time.