IMF praises Ireland and calls for cuts in European interest rates
THE International Monetary Fund has praised Ireland’s efforts to address the budget deficit and called on the European Central Bank to cut interest rates in a bid to boost growth in the region.
Calling for “unconventional” ways to push the eurozone out of the crisis, it also praised Irish policies designed to improve the country’s finances.
Comparing Ireland with Portugal in a new report, said that Ireland “has a well-established institutional framework in place when the crisis hit, strengthening the country’s capacity to deliver on targets and providing firm control over local government spending.”
The IMF said that both countries’ programmes have placed the burden on the wealthiest in society.
The IMF’s Fiscal Monitor analysed the budgetary positions of governments worldwide.
It added that Ireland’s “public finance management, revenue administration and the debt management agency have been proactive, anticipating problems and implementation challenges, and recalibrating policies accordingly”.
According to the IMF, Ireland will see positive growth of 0.5pc this year and 2pc in 2013 – one of the highest forecasts for a eurozone state.
By comparison, the eurozone will record negative growth of -0.5pc in the first half of the year with a gradual return to growth in the second half.
It recommended cutting interest rates as a means to boost growth in the eurozone area.
The IMF said a pan-European Agency is necessary to take financial stakes in banks "including in countries with little room to do so themselves."
Members of the EU/IMF/ECB troika are in Dublin this week to analyse Ireland’s progress under the bailout loans process.
It is headed up by IMF official Ajai Chopra.