herald

Sunday 17 December 2017

IMF give us an A+ pat on the back for austerity

IRELAND has received an A+ from the IMF over reforms carried out as it handed over the next €1.4bn of funds.

The organisation praised positive moves in reducing Government spending and in financial regulation.

But it says that external pressures from the euro area would negatively impact Ireland.

The International Monetary Fund said that it has finalised the sixth review of Ireland's bailout programme and says that everything is going to plan although some problems still exist.

The Washington-based agency, led by Christine Lagarde, inset, says Ireland's implementation of the conditions of the bailout programme has been "steadfast" and "strong".

Taxes continue to over-perform, the IMF notes, and spending over-runs have moderated.

Privatisation has been welcomed by the IMF as it says that some of the money raised will be used to boost growth.

However, but it says that stronger enforcement of competition rules will be needed to get the best out of the sale of State assets.

And it says that bond spreads have widened in recent months due to "tensions in the EU".

The Fund says that if the world economy weakens further, accommodating a fall in revenue would help to protect the fragile recovery.

This indicates that the IMF believes that if the world economy gets much worse, it would prefer Ireland to have a wider budget deficit rather than further cuts. "Ireland's policy implementation has continued to be steadfast and ownership of the programme remains strong despite the considerable challenges the country is facing," the IMF said.

clairemurphy@herald.ie

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