Portugal fails to meet public deficit target for last year

Portugal failed to meet its deficit target for last year as the country remained mired in recession, causing public debt to increase more than expected.

According to figures released Thursday by the National Statistics Institute (INE), the shortfall in the government’s books in 2012 amounted to 6.4 percent of GDP, compared with a target of 5 percent. Outstanding public debt was equivalent to 123.6 percent of GDP, three percentage points more than planned. The figures now go to the European Union’s statistics office Eurostat for verification.

Earlier this month, Finance Minister Vítor Gaspar estimated the deficit at 6.6 percent of GDP, insisting at the time that the failure to meet the target was due to differences in the accounting treatment of the figures. He highlighted the fact that the EU did not accept the inclusion of the proceeds from the sale of the airport operator ANA to the French group Vinci for 1.2 billion euros in the calculation of the deficit.

Two other operations were also reclassified, including a capital increase of 750 million euros in state lender Caixa Geral de Depósitos. At Brussels’ insistence, an operation worth another 750 million euros involving the state holding company Parpública was reclassified.

Gaspar said that without these differences of accounting criteria Portugal’s public deficit for last year would have been below 5 percent.