WASHINGTON (AFP) ― The International Monetary Fund said Monday it was immediately releasing about 3.98 billion euros ($5.4 billion) to Portugal, part of a three-year rescue of the eurozone country.

The IMF executive board on Monday completed a review of Portugal’s performance under an economic program supported by the 27.27-billion-euro emergency loan approved in May, the lender said in a statement.

The IMF loan is part of a rescue package with the European Union amounting to 78 billion euros over three years.

Lisbon has been forced to adopt tough austerity measures in an effort to stabilize the public finances, dampening domestic consumption in the process.

Last week the government announced the economy shrank 0.9 percent in the second quarter compared to the same period in 2010, while domestic demand dropped at an annualized 5.2 percent.

The Portuguese government forecasts a 2.2-percent recession for 2011 and a 1.8 contraction for 2012. It forecasts a return to growth in 2013.

Portugal, the third eurozone country after Greece and Ireland to have received an IMF-EU bailout package, no longer raises long-term debt on the markets as borrowing prices are too high.

Portuguese finance minister Vitor Gaspar said last Tuesday that Portugal would return to the markets by 2013 once the country had passed this “financial emergency.”

On August 12, the IMF, the EU and the European Central Bank gave the green light for an 11.5 billion euro second tranche of aid as part of Portugal’s debt bailout plan, citing progress in the country’s austerity measures.