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Portugal's deficit rises to 4.4 pct due to Banif bank bailout

Xinhua, April 21, 2016 Adjust font size:

Eurostat revealed on Thursday that Portugal's deficit was the third highest in the eurozone, ending 2015 at 4.4 percent, due to the resolution costs of the bailout of the bank Banif.

Portugal's public debt rose to 129 percent of GDP, equivalent to 231.36 billion euros (about 261 billion U.S. dollars), the EU statistics agency added.

Portugal therefore missed its deficit target last year of 2.7 percent and is above the EU ceiling of 3 percent, ramping up international concern, and is subjected to deficit reduction measures as a result.

The government had hoped that the rescue of bank Banif would not be considered when assessing the country's deficit.

Portugal agreed a 2.2-billion-euro bailout for the Madeira-based lender in December. The government admitted it would hit tax payers hard but was a definite solution.

Portugal's new government headed by Prime Minister Antonio Costa has pledged to boost growth and the budget for 2016 shows Portugal expects to achieve a 2.7 percent deficit by 2016.

The eurozone's deficit decreased last year to 2.1 percent from 2.6 percent in 2014, according to Eurostat. (1 euro = 1.13 U.S. dollars) Enditem