Outlook for Portugal.
Following four years of stable economic growth and budget deficit reduction, the Socialists will likely be re-elected as the largest party but again face the prospect of ruling without a majority.
- Spanish political and economic uncertainty will increase the attractiveness of Portuguese debt.
- The right-wing Social Democratic Party's inability to recover support could lead to radicalisation within the party.
- The government will push ahead with plans to build a second airport in Lisbon despite environmental groups' opposition.