Debt crisis: unemployment in Portugal is 'number one' concern The IMF's team of debt inspectors concluded that while Portugal remained on track to meet its 2012 deficit target of 4.5pc, unemployment, which climbed by one percentage point in the first quarter of 2012, had generated a deficit gap of 0.5pc of GDP. While the gap is expected to be offset by lower than expected interest payments on its debt and "re-programming of EU funds," Abebe Aemro Selassie, the IMF's mission chief for Portugal, said: "It's important to know that we have always said that we keep an open mind when setting these targets and they're not set in stone." He said that the government will work on policies to get "to the nub of the problem," including helping young people into employment and avoiding policies that cause "excess job losses." Debt is now expected to peak at around 118.5pc percent of GDP in 2013, the IMF said, 3 percentage points higher than projected in April. On a positive note, the IMF added that Portugal's austerity programme had a "reasonably strong" chance of success. It also predicts that the economy will contract by 3pc this year, narrower than the 3.3pc predicted in April.