Debt and late supplier payments deepen the impact of the Azores deficit

The Azores ended 2025 with a public deficit of about €305.5 million after adjustments, equivalent to roughly 5% of regional gross domestic product. The Economic and Social Council of the Azores (CESA) expressed concern about the region’s finances after reviewing the 2025 regional accounts at a meeting in Ponta Delgada.

Gualter Couto, who heads CESA’s Economy and Development committee, linked the gap between revenue and spending to an increase in regional debt. He said investment under Portugal’s Recovery and Resilience Plan (PRR) had been a significant factor in 2025 and would continue to affect the accounts in 2026.

Couto compared the Azores with Portugal as a whole and Madeira, both of which recorded budget surpluses in 2024 and 2025. He raised concerns about regional revenue and the Regional Finance Law. According to Couto, the Regional Government expects its accounts to be more balanced in 2026.

CESA president Piedade Lalanda also urged the region to prepare for the period after the PRR, highlighting potential effects on the construction industry when the programme ends. She pointed to the contribution of healthcare and public companies to regional debt, as well as late payments to suppliers that can affect small businesses and employment.

CESA described the low unemployment rate in 2025 as a positive sign but called for attention to unemployment among young people and to the higher rate affecting women. The deficit therefore matters beyond the annual accounts: it raises questions about timely payments to local firms and how the Azorean economy will adjust as PRR investment winds down.