Portugal 2010 budget deficit revised higher

Discussion in 'Wall St. News' started by ASusilovic, Apr 24, 2011.

  1. (Reuters) - Portugal's budget deficit for 2010 has been revised higher to 9.1 percent of gross domestic product, raising pressure on the caretaker government as it negotiates the terms of a bailout likely to reach 80 billion euros.

    Statistics agency INE said in a statement late on Saturday it had revised the deficit higher due to the full inclusion of three public-private partnerships on state accounts.

    Portugal this month became the third euro zone country to seek a bailout, after Greece and Ireland, as the country's borrowing costs became too costly after the government collapsed.

    INE said the changes to the deficit came about due to revisions carried out of Portugal's public accounts together with European statistics agency Eurostat. The revisions had been accelerated due to the request for a bailout, INE said.

    "Following on from the request for foreign aid by Portugal, there was a necessity to accelerate the calendar (of revisions) with the objective of compiling current data for 2010 that will form the point of departure in the negotiations," it said.

    Officials from the European Commission, the IMF and European Central Bank are currently in Lisbon to go over Portugal's public accounts. Portugal's caretaker government hopes the loan and its terms can be finalized by mid-May.

    Portugal's 2010 budget deficit had already been estimated by INE at 8.6 percent of GDP, above the government's target of 7.3 percent. It announced that result at the end of March, after revisions sought by Eurostat of public accounts had started.

    The revision meant Portugal's total debt-to-GDP ratio had also risen in 2010, to 93 percent from the previous estimate of 92.4 percent, INE said.

    The higher budget deficit last year is likely to make it harder for Portugal to reach this year's deficit goal of 4.6 percent of gross domestic product.

  2. Why is a country like Portugal using the euro? They have little to no control over the currency so when something goes bad they have to rely on some other country to help them out. A sovereign country should be able to fix their own problems.

    A team is only as strong as its weakest member. The euro zone therefore is bogged down by Portugal, Greece and Ireland.
  3. elon


    They're really going for 4.6% deficit? From 8.6%? What they need is some realistic goals.