LISBON Oct 14 Portugal's minority government
unveiled a 2017 draft budget on Friday targeting an ambitious
deficit reduction to 1.6 percent of GDP from this year's
estimated 2.4 percent, yet vowing some tax cuts and pension
hikes to secure its approval in parliament.
Presenting the budget bill at a news conference, Finance
Minister Mario Centeno said it involves rigorous control of
state spending and will further consolidate public finances.
The centre-left Socialist government, which is backed in
parliament by two far left parties, expects the economy to grow
at a slightly higher pace of 1.5 percent next year following a
slowdown to 1.2 percent in 2016.
Portugal's anemic growth has triggered investor worries that
the heavily indebted country could lose its last
investment-grade rating and, without which the European Central
Bank would stop buying its bonds, possibly triggering a new debt
But the government has said the budget should convince
rating agencies to at least maintain their stance on Portugal
and possibly upgrade their marks next year.
Canada's DBRS, the last of the major raters that keeps Portugal
at investment grade, is due to review its stance on Oct. 21.
The Communists and the Left Bloc, who jointly with the
Socialists hold the majority of parliament seats, have signalled
they would support the general outlines of the budget proposal,
but seek "improvements" before the final vote.
(Reporting By Sergio Goncalves, writing by Andrei Khalip,
editing by Axel Bugge)