LONDON (MNI) – The IMF has urged Ireland to stick to its fiscal
consolidation targets and be prepared to adopt additional steps in the
event of further shocks to the economy.
“The authorities’ ambitious targets remained appropriate, but their
achievement would require continued resolve. Directors agreed that the
consolidation plan would benefit from greater specificity. Many
directors also encouraged the authorities to stand ready to adopt
additional measures to reach the fiscal goals and retain hard-earned
credibility in the event of unfavorable developments”.
The Fund’s Executive Board said the government’s ‘decisive’
measures to support the Irish banking sector had helped to stabilize the
economy and it encouraged Dublin to sustain its consolidation efforts.
The Executive Board warned that the correction of pre-crisis
imbalances will weigh on growth and lead to continued high unemployment.
“The unwinding of these imbalances – arising from rapid credit
growth, inflated property prices, and high wage and price levels – could
limit the upside potential. In this context,”
The IMF said that the Irish economy remains vulnerable to shocks
and that with only limited fiscal resources now available to it, the
Irish government would need to maintain a ‘steady policy course’ to
minimize risks and sustain market confidence.
The comments appear in the Fund’s latest Article 4 consultation
report on the Irish economy published today.
–London Bureau; Tel: +442078627492; email: william.wilkes@ntkn.com
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