Socialist Prime Minister Antonio Costa (centre) arrives at a party gathering in Lisbon as exit polls show the Socialists have taken the lead in Sunday's election. — AFP Photo

LISBON — Portugal's incumbent Prime Minister Antonio Costa's Socialists won a general election marked by low turnout on Sunday after presiding over a period of solid economic growth following years of austerity.

The Socialist Party (PS) took 36.65 per cent of the vote, followed by the centre-right Social Democrats (PSD) with 27.9 per cent, according to near total results from the interior ministry.

That left the PS, which has governed for the past four years with the support of two smaller hard-left parties, with 106 seats in the 230-seat parliament, up from 86 seats in the outgoing assembly and just ten seats short of an outright majority. Four seats still must be attributed according to the results of votes cast abroad.

The election bucks the trend of declining centre-left fortunes and the rise of far-right populist forces seen elsewhere in Europe.

A new far-right formation, Chega! or "That's Enough!" entered parliament for the first time but it won a single seat.

Turnout was just 54.5 per cent, the lowest level for a general election since Portugal returned to democracy after a decades-long right-wing dictatorship was toppled in 1974.

The question now is who Costa, 58, a former Lisbon mayor, will pick as his allies.

After the last general election in 2015 in which the PS finished second, Costa convinced the Communists and the Left Bloc to support a minority Socialist government, an unprecedented alliance that foes nicknamed the "geringonca", or odd contraption.

'Stability is essential'

During his victory speech Costa said he wanted to "renew this experience" of an alliance with the hard-left.

"The election shows that the Portuguese like the 'geringonca', they like this political solution," he said as supporters chanted "Victory!".

"Stability is essential for Portugal's international credibility and for attracting investors. The PS will strive to find solutions that ensure this stability for the entire legislature."

Both the Left Bloc, which won 19 seats just as in the last election, and the Communists, which won 12 seats, five fewer than in the last polls, said they were willing to once again back the Socialists.

A strengthened PS has more alternatives to get laws approved in parliament, political analyst Pedro Norton told public television RTP.

"This is an incentive for it to govern alone, by searching for ad hoc agreements" to govern instead of forming a formal agreement, he added.

The election gave Costa another potential governing partner as the upstart People-Animals-Nature party (PAN) which has backed his budgets in the past won four seats, up from just one.

'Live more comfortably'

After coming to power in 2015, Costa undid some of the unpopular austerity measures introduced by the previous PSD-led government in return for a 78-billion-euro (US$85 billion) international bailout that kept finances afloat after Portugal was clobbered by the eurozone debt crisis.

Taking advantage of the global economic recovery, he reversed cuts to public sector wages and pensions while still managing to bring the budget deficit down to nearly zero this year – the lowest level since Portugal's return to democracy in 1974.

On his watch Portugal's economic growth was higher than the European Union average in recent years – 2.4 per cent in 2018 – while the jobless rate fell to 6.4 per cent, the level before the debt crisis, but critics complain of low salaries, job insecurity and soaring property prices amid a tourism boom.

Retired municipal worker Antonio Tavares, 76, said he voted for the Socialists because the government raised pensions by 50-100 euros ($55-110) per month.

"It's not a lot, it should be more, but that allows one to live more comfortably," he said after casting his ballot in Lisbon.

The PS had enjoyed a double-digit lead over the PSD for many months but the gap between Portugal's two main parties shrunk in the final stretch of the campaign, especially after a scandal concerning former defence minister Jose Azeredo Lopes resurged.

Lopes was charged last week with abuse of power and denial of justice over his role in the alleged cover-up of an arms theft from a military depot in June 2017. — AFP