IMF Disburses $1.24 Billion to Portugal as Outlook Improves

The International Monetary Fund agreed to disburse 910 million euros ($1.24 billion) to Portugal under its bailout program and urged the country to reduce public debt by resisting an increase in spending.

“While the short-term outlook has improved, unemployment, while declining, remains high and risks remain,” IMF Deputy Managing Director Nemat Shafik, who chaired today’s board of director’s meeting, said in an e-mailed statement.

“The authorities’ continued strong commitment to program implementation is crucial to strengthen the recovery and make further progress in achieving fiscal and external sustainability,” she said.

Portugal is trying to regain complete access to debt markets with its 78 billion-euro rescue program from the European Union and the IMF ending in mid-May. The country yesterday sold 3 billion euros of 10-year bonds through banks after signs of economic recovery spurred a rally in higher-yielding European fixed-income assets.

“The commitment by the European leaders to support Portugal until full market access is regained, combined with continued strong program implementation, is essential to help the country remain resilient to shocks and consolidate progress,” Shafik said in the statement.

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