Portugal hikes unemployment forecast

Portugal, which is implementing austerity policies under an EU-IMF bailout, will see its unemployment rate soar to 15.5 percent at the end of this year and 16 percent next year, Finance Minister Vitor Gaspar said Friday.

Previously the government had expected unemployment to rise to 14.5 percent this year and drop to 14.1 percent in 2013 as the economy begins to recover.

Eurostat said Friday that unemployment in eurozone member Portugal rose to 15.2 percent in April with youth joblessness hitting 36.6 percent.

The minister said the government would investigate the causes of unemployment in an upcoming report though stressed the importance of structural reforms to the Portuguese economy.

Last month parliament gave final approval to labour market reforms, set down in a 2011 bailout accord with the European Union and International Monetary Fund, which are designed to give businesses greater freedom in managing their workforce.