Business Irish

Friday 23 March 2018

IMF warns jobs, debt threaten our recovery

Colm Kelpie

Colm Kelpie

HIGH unemployment will be the most important challenge as the country leaves the bailout, the International Monetary Fund (IMF) warned yesterday.

They also cautioned that the mortgage arrears problem was a "cloud of uncertainty" that threatened to hold back Ireland's recovery.

As the troika wraps up its final review IMF Ireland mission chief Craig Beaumont said three fifths of those out of work have been unemployed for more than a year.

"Some of them will find it quite difficult to regain work even as employment starts to recover," he said.

Mr Beaumont said progress wasn't as fast as hoped in tackling mortgage arrears.

He said efforts were made to make the bankruptcy regime "more workable" and a legal judgement prohibiting repossessions had been dealt with.

But he said there has been a "wait-and-see attitude" from households and banks.

"There seems to be no sufficient engagement to deal with the problem. There's just this cloud of uncertainty that hangs over the banks' balance sheets and hangs over the property market and together they hold back Ireland's potential recovery," he said.


Mr Beaumont said the Government needs to continue fiscal consolidation in the next few years because public debt remains higher than 120pc of the economy's value and the deficit remains high.

The senior IMF official said the Government outlined a need in 2014 and 2015 for measures to reduce the deficit.

"There would still be further reductions in the deficit in subsequent years, but they may not need active measures, or not so substantial active measures, just maintaining a close control of spending, relative to growth in the economy," he said.

"And over time, progressively, lower the deficit."

And he highlighted that growth was lower than had been expected.

However, he concluded: "My message is Ireland's programme will become an example that we will learn from in the future."

He also said it was not decided if a permanent IMF representative would remain in Dublin after the bailout ends.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business