LISBON – Any restructuring of Portugal's debt is out of the question and the country's bailout program is progressing well, the head of the International Monetary Fund said on Saturday.
IMF chief Christine Lagarde told Portuguese weekly Expresso that she was also confident Portugal would not follow Greece into a spiral of economic recession.
The European Union and IMF gave Portugal a 78-billion-euro ($102-billion) bailout in 2011 and the lenders have praised the country for meeting most of their terms. They relaxed Portugal's tough budget goals last year as the country's deepest recession since the 1970s eroded tax revenues.
"It is out of the question," Lagarde told the weekly, when asked if Portugal may be forced to restructure its debt.
"The Portuguese authorities are determined to do what is necessary to complete the program in order to regain access to (bond) markets," she said.
She added that she expected the IMF to approve the country's next loan tranche, after the sixth review that was carried out in the autumn.
"The Portuguese authorities and the Portuguese have been extremely courageous and firm in applying difficult and painful reforms," she said.
Some economists have said Portugal may be forced to extend the loan deal beyond this year, when it is scheduled to return to financing itself in bond markets in the third quarter.
Lagarde said the Portuguese should not expect any changes to the loan agreement. "But we have to adapt the program, review after review, bearing in mind all the implications," she said.
Asked if she was convinced Portugal would not follow in Greece's path, she said: "Yes, I am."
($1 = 0.7666 euros)
(Reporting By Axel Bugge; Editing by Ruth Pitchford)