'Portugal will enter recession this year' - finance minister

Portugal's finance minister said its €78bn EU rescue package will push the country into recession this year.

Fernando Teixeira dos Santos said the austerity measures will leave the country in recession for the next two years, the BBC reports. He expects the economy to contract 2% in 2011 and 2012 as the country is forced into further tax rises and spending cuts. He added Portugal's debt to GDP ratio will keep climbing until 2013. Earlier this week Portuguese caretaker Prime Minister Jose Socrates signalled his approval of the new three-year bailout agreement with the European Union and International Monetary Fund after weeks of talks.