The International Monetary Fund said it was releasing 5.17 billion euros ($6.78 billion) to crisis-stricken Portugal under a program aimed at helping it come to grips with its high budget deficits.
The IMF cited recent progress on fiscal structural reforms including restructuring public enterprises that it said would support ongoing efforts at budget reform.
The IMF and European Union are offering a package of financing totaling 78 billion euros over three years for Portugal. So far, they have given the country high marks for its reform efforts.
Amid tight austerity, the bailout is beginning to show results. Portugal was able on Wednesday to sell 18-month Treasury bills at auction, the longest-dated debt issued since it was forced out of the bond market in March 2011.
IMF Deputy Managing Director Nemat Shafik said Portugal will have to keep up strong program implementation to win back market confidence but said it appeared that targets for 2012’s deficit will be met.
“Good progress has been made on implementing policies under the program and early signs indicate that the required economic adjustment is taking place,” Shafik said. The IMF has set up an Extended Fund Facility arrangement for Portugal, providing expedited access to funds, and said that so far it has disbursed 18.56 billion euros from it, Reuters reported.