Portuguese Parliament Approves Costa's Budget in Final Vote

Portugal’s parliament approved Prime Minister Antonio Costa’s first budget, three months after his minority Socialist government was sworn in.

The 2016 plan was approved in a final vote on Wednesday with backing from the ruling Socialists, the Left Bloc, the Communists and Greens, said Eduardo Ferro Rodrigues, the assembly’s president. The Social Democrats, the biggest opposition party, and the conservative CDS party voted against. The budget had been approved in an initial vote on Feb. 23.

Prime Minister Costa plans to reverse state salary cuts faster than the previous administration proposed, while increasing indirect taxes. Costa says he can keep the budget deficit within the European Union limit of 3 percent of gross domestic product through 2019. Euro-area finance ministers on Feb. 11 told Portugal to make plans for additional budget measures in case it runs into trouble meeting its targets.

The government aims to narrow its budget deficit to 2.2 percent of GDP in 2016 from 4.3 percent last year, and forecasts debt will decline to 127.7 percent of GDP in 2016 from 128.8 percent in 2015. It sees the economy growing 1.8 percent this year.

The finance ministry is now working on the country’s stability program, which the European Commission says is due by the middle of April.

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