LISBON, June 24 (Reuters) - Portugal swung to a budget deficit of 0.2% of gross domestic product in the first quarter from a surplus of 1.1% a year ago, with expenditure growing at a higher rate than revenue, official data showed on Monday.
The National Statistics Institute (INE) said the budget deficit was due to an 11% year-on-year increase in public expenditure, while revenues increased by just 7.3%.
The new centre-right government has estimated its Socialist predecessors approved up to 2.5 billion euros ($2.68 billion) in spending and commitments between November - when former Prime Minister Antonio Costa resigned - and March, when the country held a general election.
The government still expects to achieve a small budget surplus of 0.2% or 0.3% of GDP this year, down from at surplus of 1.2% in 2023 - the country's strongest in 50 years of democracy.
INE said that expenditure rose mainly due to subsidies more than doubling after an "additional allocation of funds to the National Electric System to reduce electricity tariffs", as well as due to increases of 12% in social benefits and of 10% in compensation for civil servants.
Revenue increased in all its components, INE added.
Two weeks ago, the
Bank of Portugal
raised its forecast for this year's budget surplus to 1% of GDP from the 0.1% predicted in December, but warned planned tax cuts and spending needed to be compensated to avoid sliding back into deficits.
($1 = 0.9327 euros) (Reporting by Sergio Goncalves; Editing by David Latona)
