The Irish economy will grow by just 0.4 per cent this year but public debt will peak at lower levels than previously anticipated, according to the latest detailed analysis by the International Monetary Fund (IMF).
The report was drafted as part of the IMF's quarterly assessment of the Government's compliance with the terms of the EU-IMF bailout. Such quarterly reporting is standard practice for states in receipt of IMF loans.
The report confirms the assessment made in July that the Government had met all of its obligations up to the middle of this year.
The report praised the Irish authorities for their implementation the programme, but stressed the risks for future implementation.
A slowdown in global growth and contagion from the euro area debt crisis were the two risks highlighted.
While welcoming the changes to Ireland's bailout funding terms, the IMF urged the EU authorities to go further with its reforms of the bailout fund, the European Financial Stabilisation Fund (EFSF).
It said the “options for additional flexibility with the aim of helping countries such as Ireland regain market access at an early stage should be actively considered".
Mirroring yesterday's analysis of Ireland's improved public debt dynamics by the Economic and Social Research Institute, the IMF's views on the State's debt outlook has improved since the organisation's last report three months ago.
Gross public debt is expected to peak at 117 per cent of gross domestic product (GDP) next year, compared to an anticipated 120 per cent three months ago. The change is the result of GDP being revised up in late June and the cut in Ireland's bailout funding terms, agreed on July 21st.
When the bailout was agreed in December 2010, debt was anticipated to peak at 125 per cent of GDP in 2013.
The IMF did not advocate additional budgetary changes beyond those already committed to under the terms of the bailout.