With huge debts, a declining economy and steady investor flight, Portugal is set to become one of the last countries in Europe to pull out of the current recession.

According to the latest projections from the International Monetary Fund (IMF) the Portuguese economy is expected to contract to about 1.5 percent in 2011 and 0.5 percent in 2012.

The IMF also projected that unemployment in Portugal would reach 11.9 percent this year and 12.4 percent in 2012, as compared to 11 percent in 2010. The current unemployment rate in Portugal is 11.2 with an estimated 610,000 out of work.

EU and IMF delegates are in Lisbon negotiating the terms of an 80-billion-euro (US$116 billion) bailout package to be agreed before the June 5 elections.

Portugal needs to have the bailout package in place in order to repay about 5.0 billion euros (US$7.2 billion) in debt by June 15.  

Meanwhile Portugal’s labor unions are mobilizing workers to protest nationwide on May Day against the new austerity measures to be announced as part of the bailout negotiations.

Labor coalition leaders have already stated that, besides the protests being planned for May Day, they will further mobilize workers for a general nation-wide strike.

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