IMF warns Portugal facing "slowdown"

The International Monetary Fund (IMF) warned Portugal on Thursday it was facing a slowdown due to the country's anti-austerity approach.

The IMF said in its latest report that while the country was recovering from the financial crisis, "its economy continues to suffer from meager growth, weak investment, and competitiveness challenges."

The report also pointed out that "its banking sector holds too many non-performing loans and public debt remains high."

Portugal had to sign a 78-billion-euro (87.39 billion U.S. dollar) bailout in 2011 when it was on the verge of bankruptcy and since then has seen a "major turnaround," however, its recovery is dwindling, the fund said.

"The economic recovery in Portugal is losing momentum. The slowdown in economic activity that began in the second half of 2015 has persisted, despite still-favorable cyclical tailwinds and supportive macroeconomic policy settings," said the IMF, which concluded its fourth post-bailout program monitoring with Portugal on Sept. 16.

The IMF also said that while fiscal loosening since last year and the European Central Bank's (ECB) monetary policy had led to robust consumption growth, overall GDP growth was held back by weaker export growth and sluggish investment.

The fund said it forecast growth of Portugal would reach 1.0 percent of gross domestic product (GDP) this year, from 1.5 percent last year, and predicted its budget deficit would be 3.0 percent this year. Endit