Portugal is expected to sink into recession this year and next due to the terms of a rescue deal worth 78 billion euros ($US116 billion).
Finance minister Fernando Teixeira dos Santos said austerity measures required as a condition of the funds from the EU and the International Monetary Fund would see the economy shrink by 2% in 2011 and 2012.
Tax rises and privatisations will be part of economic restructuring.
The EU said the terms of the bail-out were ''tough'' but ''necessary and fair''.
Most of the funds, 52 billion euros, will come from the EU and the rest from the IMF.
The BBC reports public spending cuts have already sparked widespread protests in Portugal and prompted the fall of the government. But the opposition pledged on Thursday to respect the terms of the package.
There will be a general election on 5 June.
The interest rate that Portugal will pay to borrow the money is not yet known. This is expected to be decided at a meeting of European finance ministers on 16 May.