Political Intelligence Article

Stability to invest

Political stability is essential for foreign investment. It is therefore crucial that Portugal pay particular attention to the stability dimension. In this respect, the political context today is ambivalent: on the one hand, the President of the Republic is committed to stability; on the other, Parliament remains highly fragmented.

António José Seguro made the pursuit of political stability a flagship of his campaign. Once in office, he reaffirmed it in his inaugural address. After a period of political instability, with successive elections, the new President Seguro’s commitment essentially comes down to one guarantee: the failure to pass a State Budget does not mean dissolving Parliament and calling new elections.

As well as breaking with previous presidential practice, this commitment offers greater security to those who wish to invest in Portugal. The current Government, although a minority one and therefore permanently dependent on negotiations to secure a majority to pass its legislation, has, with the President’s backing, the opportunity to serve out the full legislative term.

This is an asset for the Portuguese economy, which is well rated by the main rating agencies and was named “Economy of the Year” for 2025 by The Economist. Where there is political stability, legislative and regulatory stability prevails, a key factor for investment. When there is continuity in public policy, medium-term planning becomes possible for investors, making large projects viable.

According to Prime Minister Luís Montenegro, Portugal is today “a beacon of political, social and financial stability”. Part of that status must come from more robust institutions and greater legal certainty. Uncertainty about the future in Europe is one of the main concerns of foreign investors, according to the EY Attractiveness Survey Portugal 2025. Portugal should therefore avoid new government crises. At a time when there are large investments coming from the United States of America – the third-largest source of foreign direct investment in Portugal -, the pursuit of political stability should be an enduring concern for the various bodies of state.

Ensuring stability to invest is a sound recipe for Portugal’s future.