The Portuguese treasury auctioned €1.2bn in 18-month bills and €300m in three-month debt sending mixed signs. This is the first auction after the country’s international creditors gave it one more year to meet its budget targets.

In a report released Friday, the rating agency says that Portugal’s return to markets is a positive step but that economic and political risks still remain. Fitch also says that the country won’t gain full market access before the end of the bailout and will need additional funding support and a new programme.

Bailed-out Portugal has made a successful earlier-than-expected return to bond markets, with strong demand by foreign investors. Secretary of State for the Treasury Maria Luís Albuquerque said this was only possible because the country had met all the commitments taken on under its bailout programme.

Portuguese public debt is now the third highest in the European Union.

Prime Minister Passos Coelho wants Portugal to “grow faster than the average of the past 12 years in the coming ones”, by making the most of European funds and sustainable investments.

An official source at BES said demand was €3bn and the issue had been placed with 280 investors, mainly from the UK (38%) and Portugal (10%).

As the government decides whether to move ahead with the sale of flag carrier TAP-Air Portugal this Thursday, interest rates on Portuguese bonds decreased due to less pressure on markets regarding the eurozone debt crisis.

In its autumn forecasts, the European Commission sees Portuguese GDP shrinking 3% in 2012 and 1% in 2013, while unemployment figures are set to hit a record high of 16.4% in 2013 after 15.5% at the end of this year.

The decision brings to €21.8bn the amount released by the IMF so far, out of a total foreseen of €28.2bn. But Portugal’s minister of finance on Wednesday told MPs that the country’s public sector debt and deficit this year are testing IMF and EU officials’ tolerance.