ATHENS—The Greek government acknowledged Sunday that it will miss its deficit target this year, as it moved ahead with a plan to slash thousands of public-sector jobs to meet the demands of international creditors.

Greece also has agreed to take some €6.6 billion ($8.8 billion) in new austerity measures in 2011 and 2012 to bring its budget back on track, but some economists warned that additional cuts will further weigh on the country's growth.

The...