IMF head Christine Lagarde praises Ireland’s economy

Leo Varadkar says free markets and open economies are better for the long term

International Monetary Fund head Christine Lagarde quoted John F Kennedy’s phrase that one should fix the roof when the sun shines when cautioning Ireland not to be complacent its strong economic figures.

Ms Lagarde was speaking at Government Buildings yesterday after meeting Taoiseach Leo Varadkar and Minister for Finance Paschal Donohoe.

While saying she was impressed by the State’s growth and employment figures, she added that it was imperative that the Government be prepared for potential shocks in the economy.

The meeting took place ahead of the publication of the IMF’s annual report on Ireland which is expected to be released in the coming weeks.


‘Potential shocks’

“We discussed some of the challenges and some of the clouds we see on the horizon for which Ireland has to prepare,” Ms Lagarde said. “[The State] has to make sure it has the resources, the rainy-day funds, the good fiscal position, to resist potential shocks whether they come from trade, from financing costs.

“This is clearly something that the Taoiseach is attentive to and I am reassured that Ireland will take all the right measures going forward,” she said.

She said when she first visited Ireland in her role as head of the IMF growth was only 1.6 per cent compared to 7.8 per cent in 2017, and unemployment was 14.6 per cent in 2013 where it is now less than 6 per cent with long-term unemployment at around 2 per cent.

For his part, Mr Varadkar said he and Mr Donohoe had a good discussion with Ms Lagarde about “our strengths and also about the risks and the downsides we face.”

The Taoiseach said: “In Ireland we are a period of sustained strong growth and increased employment nearing full employment.

“We must proceed carefully to ensure the benefit is shared with everybody in the country and all parts of the country as well.

“We need to guard against the kind of policies that resulted in boom and bust in the past.

“We want to be prepared for some of the external risks.”

He said it was always valuable to hear the views of external experts and the Government always listens very carefully to what the IMF has to say.

“It has given us very good advice. It’s not advice that we always want to hear but it is important advice nonetheless.”

Mr Varadkar said the meeting had also touched on international trade and the IMF preference for an open rules-based economic order.

“It’s a view that we share in Ireland very strongly. We believe that free trade, free markets and open economies will leave us better off in the long term.

“Growing international tensions present a real risk to economies, including Ireland’s, one of the most open in the world. We agreed that in a trade war, there are no winners.”

Gender equality

On the issue of gender equality, he said that participation rate for Irish women has recovered in recent years, but still lagged being many of the State’s comparators.

“This month, the Government will approve the General Scheme of Gender Pay Gap Bill which will promote transparency on wage levels – initially for large employers, with 250 employees or more, but extending over time to smaller employers.

“We will also establish a business-led group charged with increasing the representation of women on boards of the largest Irish publicly listed companies.”

“For State boards we’re already making good progress, 52 per cent of those appointed in 2017 were female, bringing average female representation on State boards to just under 40 per cent by year-end.”

Harry McGee

Harry McGee

Harry McGee is a Political Correspondent with The Irish Times