Portugal aims to cut budget deficit to 2.6% of GDP

(LISBON) - Portugal's government said Thursday it aims to cut the country's budget deficit to 2.6 percent of GDP this year, a more aggressive plan than expected due to European Union pressure.

The Socialist Party-led government, which took office in November, also projected economic growth of 2.1 percent in 2016, a higher figure than forecast by Portugal's central bank and the European Commission, the latter of which expects expansion of 1.7 percent.

"This is a responsible budget that supports growth and employment, and which ensures the rigour of the public accounts," Finance Minister Mario Centeno told a news conference.

The deficit target is more aggressive than the 2.8 percent of GDP target previously set by the socialists, but Prime Minister Antonio Costa admitted Wednesday that Brussels had pushed for "extra effort" from Lisbon.

The country's deficit in 2015 is expected to be 4.2 percent of GDP, according to an estimate from the Portuguese debt agency.

Portugal received a massive international bailout in 2011 that saved it from defaulting, but in return the country had to introduce a string of austerity measures.

In four years, more than 78,000 public sector jobs were cut -- more than 10 percent of a total of 650,000.

Since coming to power, Costa's government has sought to pull off a tricky balancing act, satisfying both Brussels and placating discontent on the left over the years of cutbacks.