Portugal records double-dip recession in 2011

Alda Silva does the bookkeeping of her food store Monday, Feb. 13, 2012 in Lisbon. Small firms with fewer than fifty workers make up more than 99 percent of Portugal's businesses and they're collapsing at an alarming rate. The debt-crippled eurozone country is choking amid grinding austerity measures enacted in return for a 78 billion euro ($103 billion) bailout, a steep recession, an acute shortage of cash, and record unemployment. (AP Photo/ Francisco Seco)

LISBON, Portugal (AP) — Portugal’s economy contracted by 1.5 percent last year, pitching it into a double-dip recession amid an acute financial crisis, the country’s statistics agency reports.

Portugal needed a €78 billion ($103 billion) bailout last year to avoid bankruptcy after a decade of feeble growth.

The government has enacted steep pay and welfare cuts and tax hikes in an effort to reduce Portugal’s debt burden, but the measures have crunched spending.

The National Statistics Institute said Tuesday that preliminary data indicated the downturn gathered pace in the final quarter.

The government forecasts a contraction of 3 percent this year as Portugal endures its worst economic period in recent memory.