The Azores ended 2025 with a provisional public-sector deficit of €305.5 million and consolidated gross regional public debt of €3.798 billion. The Economic and Social Council is calling for tighter control of current expenditure, faster payments to suppliers and, above all, a strategy for the difficult transition after the Recovery and Resilience Plan.
Public accounts are ultimately about more than accounting. Behind a deficit are choices about hospitals, salaries, public companies, roads and social protection; behind public debt lies a claim on resources that future budgets will also have to accommodate. That is the concern now being expressed by the Economic and Social Council of the Azores (CESA), which, while recognizing positive economic and social developments during 2025, is warning that the trajectory of the Region’s public finances requires greater attention
The latest figures sharpen that concern. According to the second 2026 notification under the Excessive Deficit Procedure, the provisional 2025 deficit of the Azorean Regional Public Administration reached €305.5 million, an increase of €23.9 million from the updated comparable figure for 2024. Consolidated gross debt stood at €3.7978 billion at the end of 2025. The official statistical methodology is important: this gross-debt measure excludes commercial debt, public enterprises outside the general-government perimeter, and the debts of Azorean municipalities and parishes. SREA Nationally, by contrast, Portugal’s general government recorded a 0.7% surplus in 2025, according to the September 2026 Excessive Deficit Procedure notification.
CESA’s response is not simply a call for indiscriminate reductions. It recommends containing growth in current expenditure—particularly personnel costs and subsidies—while preserving the quality and universality of public services. It also wants stronger monitoring of regional borrowing, quarterly indicators capable of providing early warning of budget deviations, continued reduction in payment times to suppliers and tighter control over the accumulation of short-term commercial liabilities. The Council simultaneously calls for policies addressing wages, poverty, young people outside employment and education or training, and gender inequalities in employment.
The question of suppliers gives the accounting debate an immediate human and economic dimension. CESA President Piedade Lalanda warned that when smaller businesses wait for government payments, the consequences can eventually reach employment. Delayed public payments are therefore not merely entries awaiting settlement: for smaller firms, they can affect cash flow, investment, payroll and the ability to continue operating. Gualter Couto, who chairs CESA’s Economy and Development committee, likewise described the direction of the regional accounts as a source of concern, while noting that the Regional Government has indicated that it expects a more balanced position in 2026.
Perhaps the most consequential warning, however, concerns what happens after the Recovery and Resilience Plan. PRR investment has injected substantial activity into the regional economy and particularly into sectors such as construction. CESA recommends preparing a specific post-PRR strategy so that the end of this extraordinary investment cycle does not produce an abrupt fall in activity. It also warns that completed projects should not leave behind permanent operating costs that future regional budgets cannot sustainably support. The Council has extended its specialized committee monitoring the Azores PRR through June 2027, reflecting the importance it assigns to managing the program’s final phase.
The issue, then, is not simply whether €305.5 million is a large deficit or whether €3.8 billion is a large debt in isolation. It is whether recurring expenditure, public investment, social commitments and debt can be reconciled with the Region’s future capacity to generate revenue—particularly when the exceptional European investment cycle begins to recede.
For islands accustomed to thinking about scarcity in terms of land, distance and connectivity, public finance introduces another finite resource: room to choose. The more tomorrow’s revenues are committed by yesterday’s obligations, the narrower that room can become.
CESA’s warning is therefore ultimately about preserving that room—not only balancing accounts, but ensuring that the Azores enter the years after the PRR with enough financial capacity to continue deciding what kind of society they wish to build.
Based on a story in Diário Insular-José Lourenço-director-The photo is also from DI.