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Portugal's public deficit soars due to pandemic

LISBON, Aug 26 (Reuters) - Portugal’s government reported on Wednesday a public deficit of 8.3 billion euros between January and July this year, over 17 times higher compared to the same period last year, due to the impact of the coronavirus pandemic.

Total revenues fell 10.5% and tax revenues dropped 14.6% as a consequence of a “contraction of the economic activity”, the finance ministry said in a statement, adding expenditures grew 6.9% due to, among other things, subsidies for the unemployment and ill people.

“Budget execution highlights the effects of the COVID-19 pandemic on the economy and public services following the adoption of mitigation policy measures,” the ministry said.

The outbreak is set to leave long-lasting scars on Portugal’s tourism-dependent economy, with the central bank expecting it to contract 9.5% this year.

Last year, the country reported 2.2% growth and a budget surplus of 0.2% of gross domestic product. (Reporting by Catarina Demony, Editing by Lisa Shumaker)