Portugal: A Public Law Overview

Introduction

Portugal enters 2026 amid a period of transition, both politically and institutionally, as well as economically and financially.

Early in the year, Portugal elected a new President of the Republic in an election marked by exceptional circumstances arising from the declaration of a state of public calamity affecting several regions. This presidential election marks the end of a particularly intense electoral period, with four elections held over the past 12 months.

In parallel, Portugal is going through the progressive winding down of the Recovery and Resilience Plan (RRP) – the largest source of public funding in recent years – and the reinstatement of European budgetary rules. The end of the RRP, coupled with an even more complex and demanding global geopolitical context, will require greater selectivity in public spending. Nevertheless, major national projects in key sectors such as infrastructure, transport or healthcare are not expected to slow down in 2026.

Economic Conditions and EU Funds

Current economic signs are very positive: Portugal was awarded “Economy of the Year 2025” by The Economist and economic development has outpaced the EU average, while maintaining a notably lower compounded average inflation rate of 3.8% (in contrast to the EU’s 4.7%).

Portugal´s stability and financial soundness are evidenced by investor confidence, reflected in sovereign bond yields (Moody’s: A3; S&P Global: A+; Fitch: A; DBRS: A (high)) with a ten-year government bond yield of 3.224%.

The closure of the RRP, scheduled for 31 December 2026, stands as one of the most significant milestones of the current cycle. Throughout the past year, public authorities have concentrated on meeting milestones and targets, renegotiating projects, and reallocating funds – with certain investments removed from the RRP now transferred to Portugal 2030 or financed directly through the state budget.

The conclusion of the RRP is expected to bring heightened audit, inspection, and oversight activity at both national and European levels, which is likely to give rise to new disputes.

In response to Storm Kristin and subsequent extreme weather events in early 2026, the government announced the “Portugal Transformation, Recovery and Resilience programme” (PTRR) – a national initiative structured around three pillars: immediate recovery support, long-term resilience, and alignment with the national reform agenda. Financing will draw on European and national sources, with the final version of the PTRR expected to be approved in early April 2026.

Infrastructure and Major Projects

Notwithstanding the gradual reduction of extraordinary European funding, public investment will remain a central pillar of economic policy.

Major infrastructure projects remain on the horizon, with the high-speed rail network standing out, notably the Lisbon-Porto connection already underway. At the same time, the government and CP – Comboios de Portugal are exploring the potential sub-concession of certain suburban rail lines in the Greater Lisbon and Greater Porto areas to private operators.

In Lisbon, while the new international airport and the new bridge linking the city to this future infrastructure move forward, expansion and modernisation works at the existing Humberto Delgado Airport will continue throughout 2026.

Further north, Porto is set to see the conclusion of a new bridge over the Douro River in 2026, the opening of a new metro line, and the introduction of a new urban mobility solution: the Metrobus.

In the port sector, 2026 will see continued implementation of the “Portos 5+” strategy, designed to modernise and enhance the competitiveness of commercial ports, with projected private investment of around EUR3 billion and a target of increasing cargo throughput to 125 million tonnes by 2035.

In the healthcare sector, the government has announced it is considering new public–private partnerships for the management of five public hospitals, while the construction of the Hospital de Todos-os-Santos in Lisbon is already underway and the tender for construction and operation of the new Algarve hospital has been launched.

Legislative and Administrative Reforms

2026 brings with it an ambitious legislative reform agenda with direct and major implications for public law. The government has signalled its intention to review key legislation this year, including the Public Contracts Code, the law governing administrative disputes, and the Court of Auditors Law. These legislative amendments have the stated aim of simplifying and streamlining procedures, tackling some of the biggest problems that still remain today in the public law landscape, such as the complexity and bureaucracy of administrative procedures (notably public procurement) and the excessive length of administrative legal proceedings.

Following the state reform guidelines adopted in 2025, the government is set to implement a range of measures aimed at simplifying and streamlining public administration. Key initiatives include: (i) completing the organisational restructuring of the 16 ministries by mid-2026; (ii) simplifying commercial, industrial and urban planning licensing regimes, notably through the rollout of the Electronic Platform for Urban Planning Procedures (PEPU), the broader applicability of the enhanced tacit authorisation regime, and the adoption of tacit approval as the standard rule; (iii) narrowing the scope of the Court of Auditors’ prior approval requirement, which has been characterised as a “bottleneck for the national economy”; and (iv) establishing a state technology holding company to centralise public IT co-ordination, reduce expenditure and boost the use of AI tools by public entities.

Effects of Global Geopolitical Uncertainty

Ongoing geopolitical instability continues to shape public policy priorities at both national and European levels. Efforts to bolster defence, cybersecurity, and critical infrastructure protection have driven increased public investment and regulatory activity. This trend entails the application of specialised procurement regimes and closer alignment with European defence and security frameworks.

Further regulatory development in this area is expected in 2026, consolidating the state’s role as both regulator and strategic economic actor. The defence sector is of particular significance, with planned investments reflecting the imperative to honour commitments under NATO and European defence policy.

Summary and Perspectives

The post-RRP era will be characterised by consolidation and selectivity. Public investment is likely to become more targeted, oversight of public spending more rigorous, and the deployment of exceptional instruments more closely scrutinised. Opportunities for market participants will be concentrated in sectors aligned with structural priorities, including infrastructure, digital transformation, and defence.

Overall, the environment remains dynamic and demanding but offers significant opportunities for those willing to adapt, innovate, and anticipate legislative and administrative trends. The ongoing drive for transparency, public governance, and digitalisation promises to transform the sector in the years ahead, creating a more competitive and robust context for national and international operators.