Passos Coelho said his centre-right government “envisaged no new austerity measures” in order to hit this year’s public deficit target of 4.5 percent of Gross Domestic Product.

At the same time, “the government will be ready to carry out any necessary adjustments,” he told parliament, stressing that nothing justified introduction of additional austerity steps.

He did not specify what any adjustment might entail.

The European Commission said Friday it expected Portugal’s deficit — the shortfall of revenue to spending — to be 4.7 percent this year as the economy shrinks 3.3 percent before returning to growth of 0.3 percent in 2013.

Lisbon anticipates a contraction of 3.0 percent this year, in part due to the tough austerity measures and reforms adopted in return for a 78 billion euros bailout agreed last year with the EU and International Monetary Fund.

The EU put the 2013 public deficit at 3.1 percent of GDP, just above the EU ceiling of 3.0 percent.

A slowing economy typically cuts government revenues while increasing spending on welfare, putting the public finances under stress.

There have been growing calls in many eurozone countries for governments to focus more on growth than austerity, culminating in French and Greek elections on Sunday when voters rejected ‘more of the same’ policies.

Parliament meanwhile gave final approval Friday to labour market reforms, set down in the 2011 EU-IMF bailout accord, which are designed to give businesses greater freedom in managing their workforce.

“I hope that these changes can help … give a boost to investment and the labour market,” Passos Coelho said.

Portugal was rescued in May 2011, after Greece and Ireland were bailed out in 2010 when they could no longer raise fresh finance on the markets at reasonable rates of interest, forcing them to seek outside help to cover debt.