Portugal economy shrinks ahead of bailout exit

(LISBON) - Portugal's economy shrank by 0.7 percent in the first quarter of 2014 for the first time in a year, official data showed on Thursday marking a sharp setback two days before the country is due to exit its bailout programme.

Compared to the first quarter of last year, Portugal's gross domestic product grew 1.2 percent, according to preliminary estimates released Thursday by the National Statistics Institute (INE).

Portugal will on Saturday become the second eurozone member to emerge from European Union-IMF assistance after Ireland, at the price of deeply unpopular budget-slimming prescriptions imposed on debt-struck nations on the periphery of the single currency zone.

But the data comes after official figures raised fresh concerns about the strength of the eurozone's recovery.

Eurostat said on Thursday the 18-nation eurozone grew 0.2 percent in the three months to March, short of analyst forecasts for 0.4 percent, and cut its estimate for the fourth quarter of 2013.

Faltering France fell back further in the first three months of the year, with no growth at all, while eurozone laggard Greece saw its economic output shrink by 1.1 percent compared to a year ago.