LISBON: Portugal is still expected to cut its budget deficit to four percent of economic output this year, even after the country’s top court rejected some austerity measures, Fitch said yesterday.
“The latest ruling ... reduces a key near-term risk to consolidation and keeps the sovereign on track to hit its fiscal targets this year,” said the ratings agency in a statement.
Portugal’s Constitutional Court last week rejected part of planned austerity measures in a blow to efforts by the government to cut its deficit to levels agreed with the European Union.
The country’s top court rejected pensions tax that was expected to bring in ¤372m ($497m) in 2015, but approved a temporary reduction in civil servants’ pay.
“The ruling reinforces our view that Portugal will hit its 2014 fiscal target of a general government deficit of four percent of GDP,” or gross domestic product, said Fitch.
AFP
