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Portugal parliament approves 2013 budget in final vote
November 27, 2012 / 1:45 PM / 5 years ago

Portugal parliament approves 2013 budget in final vote

LISBON, Nov 27 (Reuters) - Portugal’s parliament approved the centre-right government’s 2013 budget in its final vote on Tuesday, which promises a third year of recession and the biggest tax hikes in modern history to ensure the terms of an international bailout are met.

Lawmakers from the ruling Social Democrats and their junior coalition partners from the rightist CDS voted for the bill, ensuring passage thanks to their parliamentary majority. The main opposition Socialists voted against.

The vote took place as a few thousand protesters grouped outside parliament to oppose the bill, which far-left opposition lawmakers have promised to challenge in the country’s constitutional court.

Tax revenues fell short this year, undermined by the worst recession since the 1970s. Still, the government is hoping that sharp tax hikes in 2013 will guarantee sufficient income to meet budget goals.

The budget aims to cut the budget deficit to 4.5 percent of GDP next year from 5 percent this year. It envisages a 1 percent decline in gross domestic product, which many economists think is far too optimistic, after this year’s slump of 3 percent.

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