Portugal's economy is improving on the back of short-term benefits but the country still needs to tackle deep-rooted problems that date from before its 2011 bailout, the International Monetary Fund said in a report published Friday, May 8, according to the Associated Press.

Portugal — like the rest of the eurozone — is benefiting from low interest rates, low oil prices and the weak euro currency which is helping exports grow, the IMF said.

But it noted that Portugal's medium-term prospects "are still clouded by legacy problems."

Those include the high private, public and corporate debt that forced Portugal to ask for a 78 billion euro ($87.5 billion) rescue because investors, fearing they wouldn't get their money back, stopped lending to the country.

Weak levels of investment and unemployment close to 14 percent are other stubborn problems identified by the IMF. And the three main international ratings agencies still classify Portuguese bonds as junk.

Meanwhile, the banking system remains unprofitable and burdened with non-performing loans, the IMF said.

The organization urged Portugal to further prune government spending by accelerating structural reforms planned for wages and pensions and reducing expenditure on government services.

However, with a general election due in September or October, leading parties are reluctant to tell voters that more austerity is needed.