IMF approves loan installment for Portugal

The International Monetary Fund said Friday that Portugal would receive a nearly two-billion-euro installment of its bailout loan as the country pursues austerity measures to trim its public deficit.

The IMF Executive Board approved the disbursement of 1.91 billion euros ($2.55 billion) after completing reviews of Portugal’s performance under an economic program supported by a three-year IMF loan, the Washington-based institution said in a statement.

The disbursement brings total disbursements under the loan to 24.34 billion euros.

The heavily indebted country received a 78-billion-euro bailout from the IMF, the European Union and the European Central Bank in May 2011.

In return for the bailout money, the international lenders demanded economic reforms to get Portugal’s public deficit down to four percent of output by 2014.

Despite growing discontent, the government has largely pushed forward with measures to repair public finances as it seeks further disbursements of the bailout funding.

The eurozone nation, which emerged from more than two years of recession in the second quarter, remains far from achieving its target of lowering the public deficit to the equivalent of 5.5 percent of gross domestic product by the end of 2013.

The IMF loan announcement came as public workers in Portugal held a 24-hour strike to protest the government’s new round of public sector wage and pension cuts proposed under the 2014 budget.