Portugal budget monitor sees revenue goal missed

* Spending cuts compensating for some revenue shortfall

* 2012 deficit target of 4.5 pct/GDP

* Government, lenders modestly upbeat on programme

LISBON, July 31 (Reuters) - Portugal's weak first-half tax collection means this year's revenue target is all but unreachable, posing further risks to a 2012 deficit goal agreed under an EU/IMF bailout, a parliament body that monitors budget execution warned.

It had already said earlier this month that Portugal, hit by a steep recession and unemployment, is likely to miss the 2012 budget deficit target unless the nation sees a hefty improvement in indirect tax revenues soon.

Still, the UTAO body said some state spending was being reduced more than expected, which should offset at least part of the revenue slippage. It also acknowledged that the public deficit for the first half of 4.14 billion euros ($5.1 billion), was below the 4.4 billion euro ceiling set under the bailout.

It did not provide forecasts for the overall 2012 deficit. The government has acknowledged there are risks but insists it can meet the budget deficit target of 4.5 percent of GDP agreed under the recession-hit country's 78-billion euro bailout.

"Meeting budget goals for revenues and social security does not seem feasible anymore," UTAO said in a document published on parliament's web site. "The tax revenue in the first half was way below what could be expected, meaning the main budget risk of the year is beginning to materialise."

But it said state purchases and spending on personnel fell more than expected, adding that "more favourable current primary spending evolution is expected for the whole year, which could compensate for part of the identified shortfalls".

Tax revenues dropped to 15.62 billion euros from 15.98 billion euros a year ago due to indirect taxes such as value-added tax.

"Although it is possible to expect an improvement in the coming months, it should not be enough to meet the year's (tax collection) goal of a 7.9 percent increase. For that to happen, an extremely significant recovery has to occur in the second half, worth 2.125 billion euros, or 21.1 percent," UTAO said.

The debt-laden country slid into its worst recession since the 1970s after imposing tough tax rises and spending cuts to put its public finances in order. Unemployment is at record highs of over 15 percent, undermining tax revenues.

Portugal's lenders and the government remain modestly upbeat about the target. But most economists say the country will need more rescue funds and more time to meet its targets.