IMF: Portugal meeting targets but outlook is grim

Associated Press

LISBON, Portugal (AP) -- The International Monetary Fund says Portugal is on track to meet conditions of its bailout but the economic outlook is grim, support for austerity measures is fading and unemployment is likely to rise further.

The IMF made the comments in a statement Thursday, a day after it approved an installment payment of 657 million euros as part of the overall 78 billion euro ($104 billion) bailout.

Portugal is meeting the goals set by the IMF and its other creditors for its 2011 bailout, but the statement said the nation's economic outlook "remains somber" with unemployment of 18 percent expected to go higher.

While Portuguese politicians originally backed the bailout's terms, the IMF said that political and social support is weakening because there is no economic relief in sight.