This majority means that he will no longer have to fall back on the support of smaller parties to approve laws and budgets leading analysts to predict greater stability in the country.

Welcomed stability

The result has been welcomed by analysts, with DBRS Morningstar stating: “The strength of the political centre underpins DBRS Morningstar's view that Portugal will continue its pragmatic approach to macroeconomic policymaking. Likewise, a majority government allows for legislative stability at an important time, when Portugal (BBB high, Stable) manages its EU funds designed to boost economic prospects”.

“This unexpected majority victory in the Portuguese election could usher in a period of political stability at an important moment,” says Jason Graffam Vice President in the Global Sovereign Ratings Group.

“The majority outcome could reduce legislative obstacles, as the country aims to boost growth prospects with effective execution of investments and reforms linked to EU funding.”

The financial rating agency Moody’s considers that the PS victory will benefit Portugal in several aspects, starting with the fact that it is “positive” for credit, as it reduces political uncertainty. In addition, it will facilitate the achievement of the goals of the Recovery and Resilience Plan (PRR).

The electoral result “is positive for credit because it ends the political uncertainty, in which the PS depended on other parties to pass the main laws”, says the credit rating agency.

“Having a majority government bodes well for the Portuguese government’s ability to meet the PRR milestones and targets, which were agreed with the European Union (EU) as part of the Next Generation EU programme.” This programme, it reads, is “crucial for Portugal's short-term growth prospects and long-term improvements in the economy's growth potential”.

António Costa took advantage of his victory speech to point out the value of stability, and promising the continuation of the dialogue.

"An absolute majority is not absolute power, it is not governing alone, it is an increased responsibility, it is governing with, and for all Portuguese people", he said.