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Portugal gets budget deficit back within eurozone ceiling of 3 percent
Real estate news By International Herald Tribune
October 11, 2007
The Socialist government's economic reforms and austerity measures enabled Portugal to cut its state budget deficit to 3 percent of gross domestic product this year, bringing it back in line with rules governing countries that use the euro currency, the prime minister said Thursday. Portugal broke the eurozone rules for the second time two years ago when its deficit rocketed to 6 percent of GDP. The eurozone's 3 percent ceiling was set to keep the shared currency stable.
Prime Minister Jose Socrates' center-left government, which took power after 2005 elections, enacted a raft of public sector reforms, slashed public spending and investment, increased taxes and reduced health and retirement benefits for civil servants. The measures have brought widespread labor protests. Socrates said figures through September and projections up to the end of the year showed the deficit would be lower than the planned 3.3 percent for this year.
Also, for the first time in seven years Portugal's public debt has fallen, from 64.8 percent last year to 64.4 percent this year, Socrates said as he outlined the 2008 state budget. "This budget ... creates a new factor of confidence and stimulates the Portuguese economy," Socrates said. The forecast budget deficit for 2008 is 2.4 percent. Further details of the budget were to be released Friday. Euro finance ministers promised earlier this year to bring down their budget deficits to zero in the next three years.
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