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Portugal deficit down by 80pc, Trade up

Tuesday, October 23 07:33:22

Portugal's current account deficit shrank by 80 percent in the first eight months of this year from the same period a year earlier, and the debt-laden country achieved its first surplus of trade in goods and services in many decades, Bank of Portugal data showed on Monday. Current account deficit fell to 1.73 billion euros ($2.25 billion) from 8.43 billion euros. The balance of trade in goods and services reached a surplus of 315 million euros, which the country's exports agency AICEP said was the first trade surplus since 1943, coming after a deficit of 4.6 billion euros a year earlier.

The trade deficit in goods alone was still a hefty 5.5 billion euros, while services, including financial services and tourism, had a surplus of over 5.8 billion euros, according to the Bank of Portugal that expects a goods and services account surplus for the whole of 2012. Debt-laden Portugal is undergoing a deep effort to consolidate its public accounts as it implements the terms of a 78-billion euro EU/IMF bailout package. It has raised taxes across the board, cut spending and wages and is betting on exports to balance its external accounts. While exports have been growing, imports have fallen along with consumption. ( C) Reuters