Portugal slashed its public sector deficit by more than half in a single year, when measured as s proportion of GDP, the national statistics bureau said Friday, taking the shortfall comfortably below eurozone limits. The deficit dropped to 2.1 percent of gross domestic product in 2016, a staggering reduction from its 4.4 percent level a year earlier.
This confirms Finance Minister Mario Centeno's prediction last month that the deficit would be "not more than 2.1 percent," its lowest share of GDP since the advent of democracy in 1974.
Eurozone members are required to keep their public deficits to below three percent of GDP, but some are struggling to do so.
Portugal's public deficit shot up into the double digits during the global economic crisis, and despite an international bailout it had difficulty bringing it back down to 4.4 percent in 2015. Portugal's economy expanded by 1.4 percent in 2016, the national statistics institute said in February, after growing by 1.6 percent the previous year on the back of stronger exports and private consumption.
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