Portugal’s parliament on Monday approved in the final reading the minority Socialist government’s 2018 budget bill that aims to trim the deficit to a new low in the country’s democratic history thanks to continuing, if slower, economic growth.
The budget was approved by the Socialists and their far-left allies in parliament – the Communists and Left Bloc – who together hold 122 seats in the 230-seat house. The remaining lawmakers voted against the document that set the deficit at 1.1 percent of gross domestic product.
The budget envisages that Portugal’s strongest economic performance in at least a decade will extend into next year, with investment, tourism and exports remaining robust. But growth will slow to 2.2 percent from 2017’s 2.6 percent.
The projected deficit is higher than the initial 1 percent plan due to hundreds of millions of euros added to expenditure on aid and reconstruction after devastating fires in June and October this year, which killed over 100 people and were an embarrassment to the government.
Still, the gap is poised to narrow from this year’s projected 1.4 percent – the lowest since Portugal returned to democracy in 1974 – as the economy is expected to grow for the fifth consecutive year.