Portuguese budget secretary Luis Morais Sarmento announced on Wednesday morning that the country' budget deficit target of five per cent of gross domestic product (GDP) is achievable.

Although he acknowledged that the 2012 deficit target was currently off by 1.6%, Sarmento said that the sale of airport operator ANA-Aeroportos de Portugal would help narrow the gap.

Portugal is expected to announce a new series of reforms at its parliament on Wednesday. New tax hikes received provisional approval by the European Commission on Tuesday and are expected to be among the new measures to be announced.

Nonetheless, Portugal had to cut back on previously planned measures after thousands of protesters hit the streets. It reduced in half its proposal to increase payments into the Social Security system, which would have reduced salaries by 7%.

On Wednesday morning, the Portuguese Treasury successfully issued €3.76bn in three-year bonds at an interest rate of 3.35%. Simultaneously, it has bought back bonds maturing in September 2013 in order to reduce its 2013 repayment burden.

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