Feb. 25 - In deep recession and on track to miss troika targets, Portugal may cut corporation tax to boose growth and investment, the country's Economy Minister tells Reuters. Rough Cut (no reporter narration).
(ROUGH CUT ONLY - NO REPORTER NARRATION) Alvaro Santos Perreira spoke to Reuters as officials from the European Union and IMF started the seventh evaluation of Portugal's economy under its 78-billion-euro bailout as recession drags on for a third year. The review is likely to lead to a request by the government for budget deficit goals to be eased as deep austerity undermines fiscal performance for a second year in a row. Indebted Portugal is mired in its deepest downturn since the 1970s, with unemployment at record levels just under 17 percent, undermining consumers who face the biggest tax hikes in living memory this year. The government and 'troika' of lenders -- the European Commission, European Central Bank and IMF -- had been expecting gross domestic product to contract just 1 percent this year after a slump of 3.2 percent last year. But the European Commission already downgraded its 2013 forecast for Portugal on Friday, to a contraction of 1.9 percent. The commission also raised its budget deficit forecast for 2013 to 4.9 percent, compared to the country's official goal of 4.5 percent.