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Bank of Portugal cuts growth forecast to 1.3 pct in 2016

Xinhua, June 9, 2016 Adjust font size:

The Bank of Portugal lowered its growth forecast for the three years up until 2018 on Wednesday and warned that additional measures in the country's budget may be necessary in order to meet targets.

The central bank forecast the economy to grow 1.3 percent of gross domestic product (GDP) in 2016, rather than the 1.5 percent rate it had forecast in March, and below the government's forecast of 1.8 percent.

It also says in its economic bulletin for June that GDP will increase 1.6 percent in 2017 and 1.5 percent in 2018, due to weaker growth in exports and investments.

The Socialist government led by Prime Minister Antonio Costa promised to lower the deficit to 2.2 percent of GDP this year, to 1.4 percent in 2017 and 0.9 percent in 2018. He has promised to reverse austerity after belt-tightening was necessary to meet targets under a 78 billion euro (88.8 billion U.S. dollars) bailout the country signed in 2011.

Costa is reversing state salary cuts and raising indirect taxes while promising to comply with eurozone rules. Endit