Portugal deficit falls, helped by one-off measure

Portugal's budget deficit to be halved this year, but mainly thanks to one-off measure

Associated Press

LISBON, Portugal (AP) -- Portugal's finance minister says his debt-stressed country's budget deficit will likely fall to below 5 percent this year from 9.8 percent in 2010.

But Vitor Gaspar says the sharp drop is largely due to the transfer to the Treasury of euro6 billion ($7.8 billion) in private banks' pension funds.

He said Tuesday that without the transfer the 2011 deficit would be around 7.5 percent — way off the target of 5.9 percent.

Portugal needed a euro78 billion bailout earlier this year as its high debt load pushed it close to bankruptcy.

The center-right government that came to power in June is enacting an austerity program of pay cuts and tax hikes through 2013 despite a recession and a record jobless rate of 12.9 percent.

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