The proposed 2027 Regional Plan foresees €1.057 billion in investment, but for the first time since 2022 it will move forward without Recovery and Resilience Plan funding. With slower economic growth, continued borrowing and greater dependence on Açores 2030, the coming year marks a transition from the exceptional financing of recent years to a more demanding fiscal landscape.
There are moments when a budget is more than an accounting document: it becomes a map of the limits within which a government must choose. For the Azores, 2027 appears to be such a year. The preliminary proposal for the Regional Annual Plan foresees €1.057 billion in investment, of which €650 million will be directly managed by the Regional Government. That represents a considerable reduction from the 2026 Plan, which provided for €1.1956 billion in overall investment and €990.9 million under the Government’s direct responsibility.
The most significant change is structural. For the first time since 2022, the Plan will no longer benefit from financing through the Recovery and Resilience Plan (PRR), making implementation of Açores 2030 considerably more important. The preliminary document specifically emphasizes the European Union’s n+3 rule, which imposes deadlines for using allocated funds, while expressing expectations that Portugal Transformação, Recuperação e Resiliência (PTRR) may eventually open another cycle of opportunities. In practical terms, however, 2027 begins with the Region having to adjust to the end of an extraordinary source of investment that helped define the preceding years.
Tourism, Mobility and Infrastructure receives by far the largest investment allocation, at €484.7 million, followed by Agriculture and Food with €131.7 million and Youth, Housing and Employment with €109 million. Health and Social Security account for €86.7 million. The Government also intends to maintain measures it identifies as central to its social and economic policy, including lower regional taxation, the Tarifa Açores mobility program, Novos Idosos, free childcare and housing initiatives, while continuing to address cost-of-living pressures.
Borrowing nevertheless remains an important part of the financial architecture. The Regional Plan projects €107 million in net borrowing, with the proposal stating that the formula through which the Portuguese State will compensate the Azores for the overall costs of territorial continuity among the nine islands has not yet been finalized. The proposed Regional Budget presents an estimated overall or effective deficit of €112 million.
Health represents an additional financial pressure. Despite what the document describes as a significant effort to strengthen funding for the sector, approximately €160 million in borrowing is expected to convert commercial debt into financial debt. The stated objective is to reduce average payment times to healthcare suppliers—an attempt to restructure the form of the debt while easing the burden that delayed payments place on those providing goods and services to the regional health system.
The proposed budget anticipates €2.335 billion in total revenue, of which €1.827 billion is classified as effective revenue. Effective own-source revenue amounts to €1.094 billion, or 59.9% of effective revenue, while transfers from the State Budget are estimated at €483 million and European Union transfers at €250 million. On the expenditure side, Health and Social Security constitute the largest area at €690 million, followed by Education, Culture and Sports at €417 million and Tourism, Mobility and Infrastructure at €297 million.
Behind those figures lies another warning signal: economic growth is expected to lose some momentum. Regional GDP growth is projected at 1.7% in 2027, compared with 2% in 2025 and an estimated 1.8% in 2026. The forecast therefore does not point toward contraction, but it does describe an economy continuing to grow at a gradually slower pace precisely as exceptional European financing recedes.
That combination makes 2027 an important test. The question will no longer be simply how much investment the Azores can mobilize, but how carefully it can choose among competing necessities once extraordinary funding becomes less abundant. Infrastructure, housing, mobility, agriculture, healthcare and social protection all remain pressing priorities, while debt and deficits narrow the room in which those choices can be made.
The years of the PRR allowed the Region to build with resources born from an exceptional European moment. The next chapter may prove more revealing. It will ask whether the Azores can transform that extraordinary investment into lasting economic capacity—and learn to navigate a future in which every euro once again carries considerably more weight.
Based on a stry in Diário Insular-José Lourenço-director. Photo from Novidades.