LISBON (Reuters) - Portugal’s government defined on Tuesday savings measures worth 1.4 billion euros, or 0.8 percent of gross domestic product, needed to slash the budget deficit next year and promised to abstain from tax hikes as well as further wage and pension cuts.
Finance Minister Maria Luis Albuquerque said most of the savings would be in line ministries, with some gains seen from a reduction in the number of civil servants. The country’s return to economic growth means that the effort required for 2015 is now much lower than 1.2 percent estimated a few months ago.
Portugal has to cut the budget deficit to 4 percent of GDP this year from last year’s 4.9 percent under the terms of an international bailout that ends in May, and then to 2.5 percent in 2015.
Reporting By Andrei Khalip and Daniel Alvarenga