LISBON, Oct 24 (Reuters) – Portugal’s public sector deficit narrowed 9 percent to 2.94 billion euros in the first nine months of 2016 from a year earlier and the government said spending rose less than envisaged in the budget, which targets a sharp deficit cut. The finance ministry said in a statement on Monday that the primary balance, excluding debt costs, was a surplus of 3 billion euros, 27 percent higher than a year ago. With three months of 2016 remaining, the deficit had reached just 53 percent of the total gap projected in this year’s budget, compared with nearly 68 percent at the same point last year, the ministry said.
The minority Socialist government has said it will cut the budget deficit to 2.4 percent of GDP this year from 4.4 percent last year, below the 2.5 percent target agreed with Brussels despite weaker-than-expected economic growth. Portugal’s commitment to the course of deficit reduction helped the country retain its last investment-grade credit rating last week, calming market fears that Lisbon might lose its eligibility for the European Central Bank’s bond purchases.
(Reporting By Andrei Khalip; Editing by Axel Bugge and Catherine Evans)
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