LISBON: Portugal's budget deficit narrowed to 5.6 percent of gross domestic product in the first nine months of 2012 from 6.7 percent a year earlier, still above the year-end deficit target of 5 percent, official data showed on Friday.
The National Statistics Institute said a 5.6 percent reduction in public spending offset a 3.4 percent drop in revenues in the period allowing to narrow the gap.
Portugal's EU, ECB and IMF lenders agreed in September to give the country more time to meet the deficit targets under their 78-billion euro bailout.
They eased this year's and next year's goals after tax revenues fell amid the country's deepest recession since the 1970s that is expected to go on next year.
The deficit goal for 2013 is 4.5 percent.
Portugal reached last year's deficit goal of 5.9 percent thanks to a one-off transfer of banks' pension funds to the state, a move that is still helping public accounts this year.
The government also hopes to use part of proceeds from Thursday's successful sale of airport operator ANA to France's Vinci to reduce this year's deficit. However, the move is yet to be approved by Eurostat.
Center>Copyright Reuters, 2012
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