March 22 (Bloomberg) -- Portugal’s Finance Ministry said the government posted a deficit in the two months through February after spending rose more than tax revenue.
Based on comparable figures, the deficit of the central administration and social security agency was 246.9 million euros ($320.1 million) compared with a surplus of 586 million euros in the same period of 2012, the Finance Ministry’s budget office said in a report on its website.
Spending rose 4.4 percent. Tax revenue increased 0.3 percent, with revenue from indirect taxes declining 6.4 percent and revenue from direct taxes rising 15.3 percent.
The Portuguese government on March 15 announced wider targets for its budget deficit as it forecast the economy will shrink twice as much as previously estimated this year. The government targets a deficit equivalent to 5.5 percent of gross domestic product in 2013, 4 percent in 2014 and below the European Union’s 3 percent limit in 2015, when it aims for a 2.5 percent gap.
EU officials last year already gave the country more time to narrow its budget gap after tax revenue missed forecasts. Finance Minister Vitor Gaspar on Oct. 3 announced an “enormous” increase in taxes and the government also plans to cut spending by about 4 billion euros in the three years through 2015.
The shortfall as measured for the European Union’s excessive deficit procedure may have been equivalent to 6.6 percent of GDP in 2012 due to one-time items and the view of the EU’s statistics office that revenue from the sale of airport operator ANA-Aeroportos de Portugal SA can’t be used to calculate the gap, Finance Minister Vitor Gaspar said on March 15. The 2012 deficit was 4.9 percent according to the measurement used in the bailout program.
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