The public debt of the Azores rose sharply in 2025, reaching €3.797 billion, according to newly released figures from the Instituto Nacional de Estatística. The increase—up more than €400 million from €3.394 billion in 2024—underscores mounting fiscal pressures in the Atlantic archipelago, even as transfers from Lisbon ticked upward.

The data, part of Portugal’s first 2026 notification under the European Union’s excessive deficit procedure submitted to Eurostat, show a regional budget that has continued to deteriorate. The Azores posted a deficit of €299.9 million in 2025, widening from €247.4 million the year before—an expansion of €52.5 million that reflects persistent structural imbalances.

Unlike the Madeira, which maintained a surplus of €162.4 million in 2025, the Azores remained in a position of net borrowing, highlighting a growing divergence between Portugal’s two autonomous regions.

Across Portugal’s regional and local administrations, the broader fiscal picture improved. The combined balance shifted from a surplus of €255.9 million in 2024 to €629.7 million in 2025, driven largely by stronger local government finances. But that improvement masked continued weakness in the Azores, where deficits have become a defining feature of the region’s public accounts.

Debt levels tell a similar story. The Azores’ liabilities grew by roughly €403 million over the year, consolidating its position as the second most indebted autonomous region in Portugal. By contrast, Madeira reduced its debt burden, from €4.924 billion in 2024 to €4.832 billion in 2025.

The statistics agency noted that its calculations follow European accounting standards, excluding commercial liabilities and the debts of public enterprises that fall outside the general government sector, in line with the SEC 2010 framework.

At the same time, financial support from Portugal’s central government increased modestly. Transfers to the Azores reached €319.3 million in 2025, up from €315.1 million the previous year—an indication of continued reliance on state backing even as fiscal pressures mount locally.

In a statement responding to the figures, the Azorean government said the data confirm the budget execution for 2025 that it had already presented earlier this year. Officials emphasized that the results incorporate operations related to the regional airline group SATA as well as spending in the health sector, both evaluated under national accounting rules.

The government also sought to contextualize the rise in debt. Net borrowing, it said, amounted to €70 million—below the €75 million authorized in the regional budget. The increase in gross debt, however, was driven by several factors, including loans taken on by companies within the SATA group, many of which carry regional guarantees.

Another major contributor was a €150 million operation aimed at clearing overdue payments in the health sector, a measure approved under both the regional and national budgets. Officials framed the move as necessary to stabilize essential services, even as it added to the region’s overall debt burden.

Taken together, the figures offer a portrait of an economy still navigating structural constraints: dependent on external support, burdened by rising obligations, and searching for a sustainable fiscal path in a volatile economic landscape.

In Diário dos Açores-Paulo Vivieiros, director

Translated into English as a community outreach program by the Portuguese Beyond Borders Institute (PBBI) and the Modern and Classical Languages and Literatures Department (MCLL), in collaboration with Bruma Publication and ADMA (Azores-Diaspora Media Alliance) at California State University, Fresno. PBBI thanks Luso Financial for sponsoring NOVIDADES.