The centre-left Socialist Party is set to get between 36-40 percent of the vote, short of majority in the parliament.
The centre-left Socialist Party collected the most votes in Portugal’s general election on Sunday, an exit poll indicated, leaving it poised to continue in government for another four years.
However, with the exit poll predicting they would get between 36-40 percent of the vote, the Socialists could fall short of a majority in parliament.
That could mean they have to pursue alliances with other left-of-centre parties, as they did in their last term with the Portuguese Communist Party and the radical Left Bloc, to pass legislation.
The poll says the main opposition centre-right Social Democratic Party will get 24-28 percent. It gives the radical Left Bloc 9-12 percent, the Portuguese Communist Party 5-7 percent and the Christian Democrats 2.4-5 percent.
Socialist leader and incumbent prime minister Antonio Costa took power four years ago on a promise to undo austerity measures introduced during Europe’s financial crisis, when Portugal needed an international bailout.
Now his government is set to reap the rewards of an economic rebound in recent years. Growth climbed from 0.2 percent in 2014 to 2.1 percent in 2018, and unemployment dropped by around half, to 6 percent, over that period.
As other Socialist parties have lost ground across Europe in recent years, Costa’s administration has proved wrong the doubters who said it would overspend and endeared itself to its European Union partners by straightening out Portugal’s ill-managed public finances.
When the Socialists took power in 2015, Costa won the parliamentary support of two far-left, Eurosceptic parties, the Left Bloc and the Communists.
But, four years on, the love affair has waned. The hard left is demanding more public spending and has accused Costa of veering to the right. Costa has already ruled out a formal coalition government but may try to renew his pact with one of the parties, or both.
The main opposition Social Democrats, polling at under 30 percent now, are expected to lose seats.
Costa's minority government has received praise from Brussels and at home for combining fiscal discipline with measures to promote growth after recession and the austerity of Portugal's 2010-14 debt crisis.
Portugal is expected to record its lowest budget deficit in 45 years of democratic history this year. The economy is on course to grow 1.9 percent this year, above the EU average, helped by export growth and a booming tourism industry.
But a series of scandals, from a nepotism row to the alleged involvement of a former minister in an army cover-up of the theft of weapons from a military base, have hit the Socialists' ratings.
During Costa's last pre-election rally in Lisbon on Friday, shop owners shouted from the sidelines: "Shame on you!"
Since the last vote, the People-Animals-Nature party (PAN) has emerged as a potential new king-maker in parliament. PAN has said it is ready to support Costa if he commits to its environmentalist proposals, but it remains to be seen whether the party wins enough new seats.
"There is a risk things will get very divided ... I have some fear," said 46-year-old Leticia Goncalves, who works in a Lisbon gallery.
Goncalves said the Socialists' policies made her upbeat about the country's future but she was worried that the party will not win a working majority.