LISBON • Portugal's ruling centre-right coalition has won a general election seen as a referendum on its austerity policies, but the results also indicated that it has lost its absolute majority in Parliament.
Prime Minister Pedro Passos Coelho's Portugal Ahead coalition took 38.6 per cent of the vote, according to near-complete results, against 32.4 per cent gained by the opposition Socialists led by former Lisbon mayor Antonio Costa.
Mr Costa, who campaigned on a promise of easing some of the painful reforms imposed on western Europe's poorest country, was quick to concede defeat but ruled out stepping down as party leader.
Sunday's election victory by the centre-right, after four years of swingeing austerity that sent unemployment and emigration soaring, marks a rare case of a bailed-out country re-electing its government.
But the coalition between the premier's Social Democrats and the conservative Popular Party looks set to fall short of the 116 seats needed to control the 230-seat Chamber, leaving them outnumbered by the Socialists and MPs from smaller leftist parties. Four seats to be decided by votes from abroad will be decided by Oct 14.
The Left Bloc, the sister party of Greece's anti-austerity Syriza, looked on course for its best result of 10.2 per cent of the vote and 19 seats, up from its previous eight.
Another big winner was voter apathy, with provisional figures suggesting a record 44.42 per cent of abstentions among the more than 9.6 million people eligible to vote.
Mr Passos Coelho campaigned on his record of having returned the country to fragile growth following one of the worst crises in its history and had warned that the Socialists could undo the progress.
His triumph could signal a turning of the tide in Europe, after voters in debt-laden Greece last month gave Prime Minister Alexis Tsipras of the hard-left Syriza party a second mandate after he forced through a tough austerity package. In the coming months, the austerity governments of Spain and Ireland will face their own election tests.
Mr Passos Coelho's coalition, in power since 2011, had trailed Mr Costa's Socialists in the polls until July, but it won the propaganda battle in the end, analysts said.
"The right has succeeded in getting across the message that returning the Socialists would lead the country to bankruptcy," political scientist Antonio Costa Pinto said.
Mr Passos Coelho, a 51-year-old economist, campaigned on his record of having navigated Portugal safely through the debt crisis, and a return to growth last year after three years of recession.
When he came to power, Portugal was on the verge of defaulting on its mountain of debt. His Socialist predecessor, Mr Jose Socrates, had just asked for a €78 billion (S$124 billion) bailout from the European Union and the International Monetary Fund. Portugal exited the bailout scheme in May last year, but only after harsh austerity measures and the biggest tax hikes in living memory.
The jobless rate has since fallen to 12 per cent from a peak of 17.5 per cent at the beginning of 2013.
But the recovery has yet to be felt on the streets. One in five Portuguese continues to live below the poverty line with an annual income of less than €5,000.