UPDATE 1-IMF praises Portugal, approves 838.8 mln euro tranche

(Recasts with statement by IMF official)

WASHINGTON, Jan 16 (Reuters) - Portugal's economic policy and reform efforts have been "impressive," a senior official at the International Monetary Fund said on Wednesday, also warning the near-term outlook for the country was uncertain given the need for more budget cuts.

"The authorities need to sustain efforts to make the tradable sector more competitive, boost long-term growth, and further advance fiscal consolidation," Nemat Shafik, the IMF's deputy managing director, said in a statement.

Her comments follow approval by the IMF board to disburse the next loan tranche of 838.8 million euros to Lisbon under the country's 78 billion euro international bailout backed by the International Monetary Fund, European Union and European Central Bank.

The lenders agreed in September to give Lisbon more time to meet the deficit targets under the rescue loan after austerity affected tax revenues that had been supposed to rise.

Despite the shortfall, the lenders have praised Portugal's efforts to implement tough spending cuts and raise taxes.

Shafik said Portugal's budget goals "remain appropriate provided economic developments unfold as expected."

She said a public debate on further budget cuts is needed.

"Significant progress has been made on the fiscal structural agenda, but continued strong implementation will be needed to achieve durable fiscal consolidation," Shafik added.

This week the Bank of Portugal lowered its economic outlook for the country, forecasting a slump in 2013 output of 1.9 percent as lower global growth dampens export demand and domestic consumption slides. This compares to a forecast of 1.6 percent the central bank provided earlier.

(Reporting By Lesley Wroughton; Editing by Sandra Maler, Bernard Orr)