(Bloomberg) -- Portugal plans to lower the value-added tax rate to 6% from 13% for a certain amount of electricity use as the government tries to help consumers face rising costs for energy and other goods.

The decision will take effect in October, Prime Minister Antonio Costa said at a press conference in Lisbon on Monday evening. Other steps presented by the premier include a 2% limit for rent increases in 2023 and extra payments for pensioners in October.

The measures announced by the government so far in 2022 to help families and companies face higher prices total 4 billion euros ($4 billion), according to Costa. Earlier this year the government took other steps including reducing fuel tax and lowering the electricity network access tariff. Like Spain, Portugal has introduced a cap on the price of natural gas used to generate electricity.

The government is keeping its target of narrowing the budget deficit to 1.9% of gross domestic product in 2022, Finance Minister Fernando Medina said at another press conference on Tuesday. The European Commission forecast in July that Portugal’s economy will grow 6.5% in 2022 as tourism recovers, while the government projects 6.4% growth. Portugal has the third-highest debt ratio in the euro area behind Greece and Italy.

Prime Minister Costa won an early general election in January and his Socialist government is now backed by an absolute majority in parliament.

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(Adds comment on budget deficit target in fourth paragraph.)

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