Costa’s victory strengthens stability in Portugal

Significance

The PS has led the previous two governments, but this result means Costa will lead a majority government for the first time and thus will no longer require support from radical left parties. The result significantly bolsters the prospects for political and economic stability over the coming years.

Impacts

• The rise of the Chega party shows that Portugal is no longer immune to the radical right.
• Tourism may not return to pre-pandemic levels until 2023 due to the likelihood of lower demand from Asia.
• Portugal’s demographic and emigration crisis threatens to undermine medium-to-long-term economic growth.