PARIS (MNI) – Growth in Ireland’s major trading partners has been
weaker than expected, raising the risk that continued sluggish
growth in the Irish economy could raise the country’s debt
ratio, the International Monetary Fund said on Thursday.
Craig Beaumont, IMF mission chief for Ireland, said on a conference
call with reporters that Irish growth would amount to only around 0.5%
this year, in part, because of weaker export growth.
“If growth were to remain sluggish, around 0.5%, the debt ratio
would not decline and would trend upwards within the medium term,”
Beaumont said. “Growth is critical to achieving debt sustainability.”
Beaumont was speaking after the so-called troika — the IMF, the
European Commission and the European Central Bank — announced that
Ireland had passed the sixth review of its bailout program.
The troika praised Ireland for the strong implementation of the
program but warned of further challenges. “The benefits of continued
gains in competitiveness are limited by relatively low trading partner
growth, while domestic demand continues to decline and the banking
sector faces difficult market funding conditions,” the statement said.
Earlier Thursday, Irish Finance Minister Michael Noonan said that
measures to spur domestic demand would be a focus for the government
and the troika, according to Irish media reports. In particular, he said
funds from sales of state assets and from the European Investment Bank
would be invested in job-creating projects.
Beaumont declined to comment on Ireland’s efforts to restructure
some E30 billion in promissory notes stemming from its banking crisis.
But he said that “we are looking at an overall solution that would
enhance Ireland’s ability to regain market access.”
–Paris newsroom, +33142715540; jduffy@marketnews.com
[TOPICS: M$$CR$,M$X$$$,M$D$$$,MGX$$$]
