The Portuguese government has estimated that the country’s bailout package will cause the country to slip into a recession for at least two years, according to The Daily Telegraph. On Friday, finance minister Texiera dos Santos has estimated that Portugal’s €78 billion dollar bailout from the European Union and International Monetary Fund will cause the economy to contract by 2% in 2011 and again by the same amount the following year. The official said the requirements will necessitate “profound changes” for the country, under budget deficit requirements of 3% and 2% of gross domestic product in 2012 and 2013, respectively.

Dos Santos said that the agreement would require the overhaul of the country’s public sector, including the sell-off of state-owned companies and other companies. Meanwhile, the Bank of Spain estimated the growth in that country during the first quarter of the year was 0.2%, unchanged from the previous quarter, adds Bloomberg. Year-over-year growth was 0.7% of gross domestic product, although Giada Giani of Citigroup warned, “Domestic demand is still largely negative and the only positive contribution comes from exports.” The growth may boost hopes that the country can avoid the fates of other debt-burdened peripheral countries, but Giani said, “The second quarter could be weaker than the first.”

Click here to read the story on Portugal's economy from The Daily Telegraph.

Click here for coverage of Spain's economy from Bloomberg News.