Portugal’s deficit was 0.9% of gross domestic product in the first quarter of this year, lower than 10.6% in the same period of last year, the Portuguese National Statistics Institute said, Xinhua reported. However, the figure is higher than 0.7% of the government target for this year. Last year’s budget balance was “largely influenced” by the recapitalization operation of the state bank Caixa Geral de Depositos, which raised the deficit to 10.6% of GDP. Excluding this operation, the deficit was only 2%, Portuguese Lusa News Agency said. On the verge of defaulting on its mountain of debt after decades of ballooning wages and state spending, Lisbon secured a bailout from the EU and IMF of €78 billion ($116 billion at the time) in May 2011. It was able to exit the program in May 2014, having sharply cut its budget deficit from close to 10% of GDP in 2010 to 2% in 2016, below the 3% ceiling fixed by European budget rules.
