Excessive Financial Revenue in State Budget
Madeira's Economy Shows Positive Signs Amidst Challenges
In the heart of the Atlantic, Madeira is experiencing a resurgence in its economy, as evidenced by recent developments. Finance Secretary Duarte Freitas discussed the budget, revealing that after three consecutive years of deficits, budget surpluses have returned.
The regional government's focus on fiscal policy and post-pandemic economic recovery seems to be paying off. The government applied a 30% tax reduction for income tax (IRS) up to the fourth bracket, aiming to stimulate investment and economic activity. This strategy appears to have been successful, as the unemployment rate in the region dropped to 5.9%.
The region's GDP grew by an impressive 14.2% in 2023, and Madeira's total revenue was €1.666 billion. Tourism, a significant sector for Madeira, saw a 22.2% increase in revenue in 2025, contributing significantly to the region's economic expansion.
However, the region's finances are not without challenges. Madeira's public debt ratio stood at 72.2% by the end of 2023, with direct public debt increasing by €232.3 million, reaching nearly €4.7 billion. This increase was primarily due to the transfer of debt from regional development companies and the public firm Madeira Parques Empresarias.
The government's tax cut strategy has not gone uncontested. Opposition parties, including PS, JPP, and Chega, have criticized the government for not extending the 30% tax reduction beyond the fourth income bracket. They argue that these tax reductions may undermine fiscal responsibility or fail to address deeper structural issues. Parties like Juntos Pelo Povo (JPP) emphasize that ongoing dialogues involving regional and national governments are needed regarding financial frameworks and regional autonomy.
Despite these criticisms, the account was approved without dissent in the parliamentary session. The document is scheduled for a full parliamentary session, where further discussions on Madeira's fiscal policies and economic future are expected.
In summary, Madeira's economy shows positive signs, with growth aided by tourism and favorable fiscal policies such as tax cuts. However, opposition parties critique these policies because they may weaken fiscal oversight, potentially increasing risks related to public finances and economic equity. The future of Madeira's economy will be shaped by these ongoing discussions and the government's response to the criticisms raised.
Personal finance in Madeira has seen improvements, with the regional government's focus on budgeting and tax cuts stimulating investment and economic activity, as demonstrated by the dropped unemployment rate and GDP growth. However, the increased public debt ratio and criticism from opposition parties concerning fiscal responsibility and structural issues suggest that politics and general news will continue to influence Madeira's personal-finance landscape in the future.
