Merkel says Portugal meeting all bailout commitments

German Chancellor Angela Merkel casts her shadow on an European Union (EU) flag as she arrives for a news conference after talks with Yemen's President Abd-Rabbu Mansour Hadi in Berlin, October 4, 2012.

LISBON (Reuters) - German Chancellor Angela Merkel said on Sunday Portugal has fully met all the goals it set in its 78-billion-euro bailout, adding the Iberian country does not need new financial help.

"Portugal is meeting the commitments it has taken on very well," Merkel told Portuguese broadcaster RTP, a day before making a trip to Lisbon.

When asked if Portugal needs a new bailout, as some economists have argued, Merkel said: "I don't have this view."

Portugal's lenders, the European Union and IMF, have approved all reviews of the economy so far but they agreed this summer to relax Lisbon's budget goals after tax revenues fell short due to a deep recession.

The country entered its deepest economic slump since the 1970s this year, when the economy is expected to contract 3 percent. Unemployment is at record highs above 15 percent and is seen rising further in 2013.

Merkel said Portugal's reforms would take time but that at the end of the process they would pay off, pointing to reforms adopted by Germany which took many years to translate into economic gains.

Portugal's center-right government is hoping to win renewed support from Europe's biggest creditor during Merkel's visit.

Prime Minister Pedro Passos Coelho has stressed that his country's only option is to fully meet the terms of its bailout in the hope of emulating the recovery of fellow bailout victim Ireland rather than Greece's crisis.

(Reporting By Axel Bugge; Editing by Stephen Powell)