Business

Portugal plans biggest spending cuts for 50 years

Pensioners protesting in Lisbon last week about the government's austerity measures
Image caption Portugal has seen numerous protests against the government's austerity measures

The Portuguese government is planning the country's biggest spending cuts in 50 years, a move its finance minister described as "unprecedented".

Vitor Gaspar said the centre-right Social Democratic administration would reduce public spending from the current 44.2% of Portugal's annual economic output or GDP to 43.5% by 2015.

The government is aiming to meet its budget deficit reduction targets.

These were agreed when Portugal required a bailout in May.

The country is now continuing to receive a total 78bn euros ($112bn; £70bn) from the European Union and International Monetary Fund.

Like neighbouring Spain, Portugal has seen a number of public protests against government spending cuts.

Mr Gaspar also announced plans for higher tax rates for the highest-earning companies and individuals.

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