Portugal 2016 public deficit shrinks 10.5pc, better than planned

LISBON: Portugal's public sector deficit shrank 10.5 percent to 4.26 billion euros ($4.54 billion) last year, coming in 1.2 billion euros below the budgeted amount and confirming the latest upbeat estimate for the budget gap, the finance ministry said.

In a statement on Thursday, it said that "this excellent result for the implementation of public accounts allows to say that the budget deficit will not exceed 2.3 percent of GDP".

Prime Minister Antonio Costa said last week already that Portugal ended 2016 with a budget deficit of no more than 2.3 percent, below the 2.5 percent target agreed with Brussels and down from 4.4 percent in 2015.

The official figure for the deficit as a percentage of GDP will only be available in March. The government estimates the economy to have grown 1.2 percent last year after 1.6 percent in 2015 and predicts an expansion of 1.5 percent this year.

The finance ministry said on Thursday that revenues last year rose 2.7 percent, outpacing a 1.9 percent increase in spending.

The primary balance, excluding debt costs, reached a surplus of 4.03 billion euros, almost 23 percent higher than a year ago.