WASHINGTON - The International Monetary Fund is releasing a € 838.8 million ($1.1 billion) installment of its loan program to Portugal, while calling the country's efforts to reform its economy impressive.

But IMF Deputy Managing Director Nemat Shafik also said that the country still faces economic challenges and needs to boost its competitiveness.

The latest money released is part of a €78 billion ($104 billion) bailout agreed to in 2011. The IMF, the European Central Bank and the European Commission granted Portugal a lifeline to avert looming bankruptcy as the country was engulfed by the eurozone's financial crisis.

Shafik said in a statement: "The authorities' policy and reform effort has been impressive." But she added: "The near-term outlook is uncertain, and sizable medium-term economic challenges remain."

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