Portugal's bailout program is off to a "good start," but its success depends on the implementation of a number of structural reforms aimed at freeing up the nation's economy after a decade of stagnation, the European Union, International Monetary Fund and European Central Bank said in a joint statement Wednesday.
The statement said the economy is likely to perform better than expected in 2011 but that the nation's ongoing recession will likely be more pronounced in 2012, with gross domestic product set to contract 3%.
The implementation of the nation's 2011 budget has been "difficult," while the 2012 budget includes measures that can bring the fiscal program back on track, the reviewers said, adding that key measures, including nominal cuts in public wages and pensions and increases in direct taxes, are appropriate in view of the need to switch to an export-led growth model.
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