Portugal government promises lower budget gap, steady 2019 growth

LISBON (Reuters) - Portugal's Socialist government promised on Tuesday in its 2019 election year budget to deliver the lowest deficit in democratic history while giving civil servants higher pay and helping families with transport costs.

In the draft 2019 budget the government said it would cut the budget deficit to 0.2 percent of GDP from this year's projected 0.7 percent, and reach economic growth of 2.2 percent, just a touch lower than this year.

The draft forecast unemployment of 6.3 percent next year, down from 6.9 percent in 2018.

While keeping the budget deficit on a downward path, the budget proposes to subsidise families' transport costs in the Lisbon and Porto metropolitan regions, where nearly half of Portugal's population lives.

The subsidy will cap two family members' monthly public transport passes at 40 euros and make all subsequent ones free.

The blueprint also unfreezes civil servants' career progression for the first time since 2009, delivering salary increases and promotions to many. Public pensions will also rise by more than inflation in 2019.

(Reporting By Axel Bugge and Sergio Goncalves)