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Portugal 'on track' with bailout programme, says IMF

After latest review, IMF says Portugal is making progress on reforms but needs to take urgent action to tackle unemployment.

PORTUGAL IS ON track with the implementation of its bailout programme, according to the IMF’s latest review.

Following its fourth review, the IMF said that the programme remains “on track admidst continued challenges” and that the Portuguese authorities “are implementing the reform policies broadly as planned and external adjustment is proceeding faster than expected.”

However, the IMF expressed concern over rising unemployment, which is says could peak at around 16 per cent next year. It called for “further action” to improve the functioning of Portugal’s labour market.

The IMF also noted that “continued tensions” in the wider eurozone area could further impact on Portugal’s development and its economic programme/

In a statement today, European Commission vice-president Olli Rehn welcomed the conclusion of the latest IMF review and said that although further public sector cuts need to be made in Portugal, “it remains essential that credit remains available to sound companies, particularly in the tradable sector”.

Rehn said that support from “across the political and social spectrum has been, and continues to be, a key element for success of reforms”.

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“Broad-based support is particular important in view of the situation of the current labour market, as structural reforms should contribute to create jobs in the medium term,” he added.

“The European Commission will also support the Portuguese government in its endeavour to tackle rising unemployment in the short term through the reprogramming of the EU Structural and Social Funds. I believe that the programme is socially balanced and seeks to protect the most vulnerable groups of the society.”

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