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Portugal Misses 2010 Deficit Target, Raising Bailout Risk

Portugal reported a budget deficit of 8.6 percent of gross domestic product last year, missing a government target of 7.3 percent and causing a jump in borrowing costs that increases the risk of a bailout.

The revisions won’t affect the government’s goal for a 4.6 percent shortfall in 2011, the national statistics agency said today in an e-mailed statement. The agency also revised the 2009 budget gap to 10 percent from 9.3 percent, after European Union accounting changes prompted Portugal to add more than 2 billion euros ($2.8 billion) to the 2010 deficit. The yields on the country’s two, five and 10-year bonds rose to euro-era records.