Portugal posted a budget surplus of 0.5% of gross domestic product in the 12 months ended in September, half of the surplus reported a year earlier as economic growth slowed down, official data showed on Friday.

The National Statistics Institute said the budget surplus came thanks to a 2.9% increase in revenues, while public expenditure grew by 1.9%.

In the 12 months through the end of the second quarter, Portugal had zero deficit.

The government expects a budget surplus of 0.8% of GDP for the whole of this year, which would be the country's second since 2019, following a revised deficit of 0.3% last year.

The Bank of Portugal is even more optimistic and forecasts a budget surplus of 1.1% this year, expecting the surplus to shrink to just 0.1% in 2024 mainly due to the economic slowdown and more permanent spending.

It expects economic growth of 2.1% this year, down from 6.8% in 2022, and 1.2% in 2024. (Reporting by Andrei Khalip and Sergio Goncalves)