Portugal unemployment falls for third straight quarter

LISBON (Reuters) - Portugal's jobless rate fell for the third consecutive quarter in the three months that ended in December, showing further gradual improvement for the economy as it entered 2014 when Lisbon hopes to smoothly exit an international bailout.

The jobless rate fell to 15.3 percent in the fourth quarter from 15.6 percent in the third. In the last quarter of 2012 unemployment stood at 16.9 percent, the National Statistics Institute said.

Portugal's jobless rate started to fall from the second quarter of last year as the economy started to show its first signs of recovery after its debt crisis, which prompted the worst downturn since the 1970s.

"This is another signal of stabilisation of economic activity in Portugal, but there is still no significant net creation of jobs," said Filipe Garcia, head of Informacao de Mercados Financeiros consultants.

Also, the average unemployment rate for all of 2013 still rose to 16.3 percent from 15.7 percent in 2012, the INE said.

The economy is expected to post its first year of growth this year since 2010. The government sees gross domestic product growing 0.8 percent this year after a decline of some 1.8 percent last year.

"For the unemployment rate to return to the lower levels of the past will still take some time," said Paula Carvalho, chief economist at Banco BPI. "Still, there is room for the improvement in activity to help (create jobs)."

Unemployment had continually risen in the past two years, to a record high in the first quarter of 2013, as the country grappled with the recession under the weight of austerity imposed by its 78-billion-euro (64.7 billion pounds) EU/IMF bailout deal that ends in mid-2014.

(Reporting By Axel Bugge, additional reporting by Filipa Cunha Lima and Daniel Alvarenga; Editing by Sophie Hares)