The Portuguese government announced Tuesday new measures including increase of economic investment and financing support for small and medium enterprises (SMEs) to promote growth and job creation in the heavily indebted country.

After an extraordinary meeting of Council of Ministers held earlier in the day, Portugal's Economy and Employment Minister Alvaro Santos Pereira told a press conference that the government will strengthen the role of the country's deposit bank CGD in market financing and set up a specialized financial institution to provide SMEs with more financing and crediting service.

"CGD should lead the granting of credit to the economy, SMEs," said Pereira.

The government also plans to lower tax rates for the SMEs and increase investment in export which will reach 1 billion euros by the end of this year, he added.

Portugal still faces deepening economic recession this year with a continuous shrinkage and high budget deficit.

The country's gross domestic product (GDP) shrank 3.2 percent last year, the lowest in the past 30 years, while its budget deficit accounted for 6.4 of its GDP, much higher than the deficit reduction goal set by the government.

The new measures came after the Portuguese government announced last Thursday spending cuts worth 800 million euros (about 1 billion U.S. dollars) or some 0.5 percent of its GDP in a fresh effort to meet its deficit reduction targets set by international lenders after a rejection of some of the austerity measures in the 2013 state budget by the country's constitutional court.

The ruling of the court has brought about a budget shortfall of 1.3 billion euros for Portugal, which has seen a deepening economic recession in the past few years.

Under a 78-billion-euro bailout agreement with the troika comprising the European Union, the International Monetary Fund and the European Central Bank in May 2011, Portugal has been implementing a harsh austerity policy which has sparked protests across the country in recent months. Endi

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