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Portuguese deficit stands at 4.5 pct of GDP in 2014, below gov't forecast

Xinhua, March 27, 2015 Adjust font size:

Portugal's public deficit stood at 4.5 percent of GDP in 2014, below the government's forecast of 4.8 percent in September last year, the Portuguese National Institute of Statistics (INE) revealed on Thursday.

"We have managed to keep our deficit three decimal points below what was budgeted and have confirmed that the objectives for 2015 will surely be met in terms of budgetary consolidation, to which the growth of the economy has contributed," Minister of the Presidency and Parliamentary Affairs Luis Marques Guedes said at a press conference on Thursday, following a cabinet meeting, according to local media.

Portugal's economy is improving, with GDP expanding in the fourth quarter at the fastest pace in a year. However, the country is still struggling to reduce its public debt, which still stands at around 125 percent of GDP.

The country exited its bailout program three years after it signed with the troika of its international lenders -- the European Commission, the International Monetary Fund and the European Central Bank in May last year.

The government forecasts the deficit to be 2.7 percent in 2015, though the IMF representatives, who arrived in Lisbon on March 5 to carry out its annual assessment of the Portuguese economy, has been critical of Portugal's progress and recently said it doubts that Portugal will be able to bring down its deficit target to below 3 percent of Gross Domestic Product (GDP).

Portugal's center-right government, led by Prime Minister Pedro Passos Coelho, has been implementing strict measures to achieve its objective agreed with the troika under the bailout program, including spending cuts and tax hikes.

The INE figures came a day after the Bank of Portugal on Wednesday improved its economic outlook, predicting GDP to grow 1.7 percent this year and 1.9 percent in 2016, a more optimistic forecast than the government's, which forecast 1.5 percent growth in the state budget for 2015 and 1.7 percent in 2016 in its economic forecast in April last year. Endit