IMF approves $1.27bn to Ireland

The International Monetary Fund has said Ireland is on track with the conditions of its bailout programme.

The IMF, one of a trio of lenders overseeing Dublin’s €85 billion bailout, said Ireland’s economy grew modestly in 2012 for the second year in a row and employment during the first quarter of this year was up 1 per cent from the same period a year ago.

The IMF’s board approved the tenth disbursal of about $1.27 billion, bringing to $27.79 billion the total funds that Ireland has received from the IMF so far. The country must meet conditions attached to the loan to get each subsequent disbursement.

Acting chairman David Lipton of IMF's executive board said Ireland has been steadfast in two-and-a-half years of work to control its deficit and improve its economy.

Public debt is expected to peak this year with economic growth accelerating next year.

Unemployment remains high at 13.7 per cent and a quarter of bank loans “are nonperforming and losses persist, hindering new lending,” said the IMF.

In April, the IMF forecast Irish growth of 1.1 per cent this year and 2.2 per cent in 2014.

Ireland was the second euro zone country to be bailed out by the IMF in 2010, after Greece, and has been one of the success stories in the euro-zone debt crisis, with European and IMF leaders eager to congratulate the country for the fiscal discipline that has helped it get back on its feet.

Inspectors from Ireland’s “troika” of lenders said on May 9 the country remained on track to complete its bailout at the end of this year, but warned it needed to do more to address entrenched unemployment and bad debts.

The IMF cautioned in April that Ireland’s prospects hinged on a recovery in the European economy and further help by European leaders to ease the burden of the country’s banking debt.

Ireland agreed earlier this month to a detailed review of its troubled banks’ loan books this year to placate its international lenders, and will have its stress tests before a Europe-wide exercise in 2014.

The move is designed to appease concerns of the European Union and the IMF, which wanted the banks to get a clean bill of health before the end of Ireland's sovereign bailout in December.

Reuters