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IMF urges Irish government to focus on fiscal buffers

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Staff Writer | June 27, 2017
IMF Ireland
Ireland   The Article IV consultation

The International Monetary Fund recommended the Irish government to focus on rebuilding fiscal buffers, strengthening economic resilience and fostering sustainable and inclusive growth.

Concluding the Article IV consultation, the executive board of the IMF said Ireland should adopt growth-friendly fiscal consolidation to further reduce the public debt-to-GDP ratio and enhance resilience to shocks and build buffers.

While the outlook for the banking system is positive, the directors observed that Brexit-related uncertainties, international regulatory changes, and elevated NPL levels pose challenges.

Directors stressed that the strong momentum in the housing market requires close monitoring and cautioned that persistent pressures may lead to imbalances.

The IMF forecast real GDP to grow at 3.9% in 2017, propelled by strong domestic demand. Over the medium-term, growth was projected to decelerate and converge towards its potential of about 3%.

Inflation was expected to stabilize at just below 2%.

Public finances were projected to improve further, allowing the government to attain its Medium-Term Objective of a structural deficit of 0.5% of GDP next year, the IMF said.

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