CENTER-RIGHT'S WORST NIGHT
The European election outcome was especially pleasing for the ruling party because their main adversaries, the centre-right Social Democrats, won just 22% of votes, their worst showing ever in any election in Portugal.
"Evidently (a Socialist majority government) could happen, but exceptional conditions are necessary such as a big crisis in the (centre-right opposition) PSD," said political analyst Antonio Costa Pinto.
PSD leader Rui Rio said "we didn't reach the objectives we hoped for" and his party had to recognise its errors.
The Socialists appear to have gained from a misstep last month by the centre-right when it united with the government's leftist allies to pass a parliamentary vote to raise teachers' salaries, prompting the prime minister to threaten to resign.
The Socialists worried the move would undermine public accounts and Costa's threat was widely seen bolstering their credentials as competent managers of the economy, which could have helped their standing in the latest polls.
Communist leader Jeronimo Sousa recently accused the Socialists of being "fixated on an eventual absolute majority" and said it was clear the Socialists "want to undo the current arrangement".
Ana Catarina Mendes, deputy head of the Socialists, told Reuters it was premature to conclude that they want to ditch the far-left, pointing out that it had backed the overwhelming majority of laws during the past three and a half years.
The Socialists turned to the Communists and the Left Bloc in 2015 to propose a parliamentary alliance to secure a majority and oust the centre right after an inconclusive election.
Their deal was based on rolling back the austerity launched by the centre-right government during Portugal's debt crisis and 2011-14 bailout. The government has restored public pensions and reversed tax hikes, which has given more disposable income back to the Portuguese and helped fuel a strong economy.
But at the same time the government has insisted on strict spending controls which have virtually eradicated the budget deficit - something unheard of in Portugal's modern democratic history and which is proving popular with centrist voters.
That has also helped erase from memory that it was a previous Socialist government that mismanaged the economy and forced Lisbon into a bailout.
"The crisis has left its mark; budget discipline has become a relevant issue for voters and is now part of the way they conceive the government's 'economic competence'," said political scientist Pedro Magalhaes.
