Portugal is “on track” to meet its 2011 deficit goal, putting the nation in line to receive an 11.5 billion-euro ($16.4 billion) aid payment next month, a team of European Union and International Monetary Fund inspectors said.

The assessment comes even after the government confirmed a hole of around 1.9 billion euros in this year’s budget. A “significant part” of that shortfall, which amounts to 1.1 percent of gross domestic product, will be covered by a one-time income-tax surcharge, Finance Minister Vitor Gaspar said today in Lisbon. Under the aid program, Portugal must cut its deficit from 9.1 percent of GDP last year to 5.9 percent in 2011.

“We are confident that the deficit target of 5.9 percent for this year will be met,” Poul Thomsen, head of the IMF mission in Portugal, said at a press conference in Lisbon today after the EU-IMF team concluded its first review of the 78 billion-euro rescue program. The three-year plan also stipulates deficit goals of 4.5 percent in 2012 and 3 percent in 2013.

With debt and borrowing costs surging, Portugal followed Greece and Ireland in seeking an international bailout. The government in Lisbon should receive the 11.5 billion-euro loan payment in September after approval by the IMF executive board and euro-area finance ministers.

Prime Minister Pedro Passos Coelho announced on June 30 that he planned an income-tax surcharge this year to help reach the deficit target. The government projects the move will raise 1.03 billion euros in 2011 and 2012 with the surcharge on salaries, pensions and capital gains.

Additional Measures

The government already estimated it needed additional measures of around 2 billion euros to meet 2011’s budget target.

Social Democrat Passos Coelho defeated the Socialist Party of former Prime Minister Jose Socrates in June 5 elections. Socrates, who requested the international bailout in April, presented his resignation in March after lawmakers rejected his proposed deficit-cutting plan.

Gaspar also said today that the government planned to move up an increase in the value-added tax on electricity and natural-gas services from 2012 to the last quarter of 2011. This will bring in additional revenue of around 100 million euros, he said.

Deficit Target

“This strategy will allow us to fulfill the deficit target if accompanied by an extremely strict and active budget policy to avoid the shortages seen in the first half of the year,” Gaspar said.

The Finance Ministry said on July 20 that Portugal’s first- half central government deficit narrowed 27 percent from a year earlier to 5.05 billion euros.

The bailout program includes monthly targets, and the financial aid is to be disbursed gradually as goals of the program are met. The European Central Bank also participated in the program review.

(Bloomberg - Anabela Reis and João Lima)