Portugal announces measures to cut deficit

10:31, May 15, 2010      

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Portugal will take austerity measures and raise taxes to reduce deficit, an official said on Friday.

The measures are "inevitable" and "easy to predict," because the country "had to show it was making an effort to contain the deficit...in order to maintain access to external financing and maintain credibility," said Bank of Portugal Governor Vitor Constancio.

The target is to cut the deficit from 9.4 percent of the Gross Domestic Product (GDP) in 2009 to 4.6 percent of GDP in 2011, he added.

The official said the deficit-reduction measures had been "well received in the financial markets." And despite the short-term restrictive impact on the economy, the measures will only be temporary and the economy will eventually come out of the woods.

Constancio made the remarks at a time when EU leaders were asking Portugal and Spain to accelerate deficit-reduction plans in exchange for assistance to solve debt problems in these countries.

Source: Xinhua


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