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Portugal revises down growth forecast

Published on 20/02/2013

Portugal's government expects the country's recession to be a deeper 2.0 percent this year than it earlier thought, Finance Minister Vitor Gaspar said on Wednesday.

“My preliminary assessment is pointing to a downward revision to the forecast for economic activity on the order of one percentage point,” said Gaspar.

The government has previously forecast the Portuguese economy would contract by 1.0 percent in 2013.

Gaspar said a revision of economic forecasts would be a central issue during the next review of the country’s finances by the European Union, International Monetary Fund and European Central Bank that begins next week.

He said the economic outlook had implications on the government’s ability to reduce the deficit, and that it was reasonable to hope that the European Commission would grant Portugal additional time.

The EU and IMF, which granted a 78-billion-euro ($104-billion) bailout in May 2011, has already relaxed the 2013 public deficit target to 4.5 percent from 3.0 percent in the original rescue plan.

According to preliminary estimate by the INE national statistics institute Portugal’s economy contracted by 3.2 percent last year.