Article IV report mirrors Summer Economic Statement to signal broadening of tax base, establishment of Rainy Day Fund and avoidance of over-reliance on corporation tax as good policy decisions
The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., today (Thursday) welcomed the publication by the International Monetary Fund of its regular review of the Irish economy, the Article IV report.
- The Article IV report is a strategic review of the Irish economy and Government policies. The report sets out the views of IMF staff on the current position of the economy and its medium-to-long term prospects, medium-term fiscal policy, as well as financial and banking policy. This year’s report recognises Ireland’s continued strong economic growth, leading to a rapid reduction in unemployment and strengthened public and private balance sheets.
- IMF staff note that Ireland’s economy continues to grow at a pace well above the EU average and is approaching full employment. They also noted that banks have continued to improve their resilience to shocks. The report outlines that the outlook is expected to remain favourable, although significant external risks, in particular Brexit and an escalation in global protectionism, will pose challenges.
Commenting on the publication of the report by, Minister Donohoe said: ‘I welcome today’s publication by the IMF, which affirms the exceptional recovery of the Irish economy. Earlier this week, in my discussions with the IMF Managing Director, Mme Lagarde, I had the opportunity to thank her for the valuable external and expert contribution such reports provide to Government policymaking. These reports leverage the IMFs extensive expertise to provide an insightful and independent commentary on our readiness to meet future challenges’.
“I am pleased to see that this report concurs with our own assessment of the Irish economy in many areas. Indeed it echoes many of the messages that were articulated in the recently published Summer Economic Statement, in particular our policies to bolster Ireland’s resilience and to rebuild our fiscal buffers in the current climate. In this regard, the report supports the Government’s focus on measures such as maintaining moderate, incremental and sustainable expenditure growth, broadening the tax base, establishing a Rainy Day Fund and safe-guarding against reliance on historically high levels of corporation tax.
“As a nation we can be proud of the strength of the economic turnaround that the report acknowledges we have achieved. However, we must be vigilant to ensure we continue to benefit from the strong growth and low unemployment that our hard work is delivering. Crisis legacy issues will continue to be addressed, we will guard against the mistakes of the past and focus on policy choices that best prepare us for the risks to the economy that may present, while delivering enhanced resilience and fostering sustainable growth for all of our people.”
ENDS
Notes for Editors
During an Article IV consultation, an IMF team of economists visits a country to discuss the country’s economic and financial policies with government and central bank officials, as well as with a range of public and private sector stakeholders. The team reports its findings to IMF management and then presents them for discussion to the Executive Board, which represents all of the IMF’s member countries. A summary of the Board’s views is subsequently transmitted to the country’s government. In this way, the IMF aims to ensure that the views of the global community and the lessons of international experience are brought to bear on national policies. Summaries of most discussions are released in press releases and are posted on the IMF’s web site, as are most of the country reports prepared by the staff.
The Article IV process is a requirement for all members of the Fund and takes place on a periodic, usually annual, basis. It is a long-standing element of Ireland’s regular engagement with the IMF. The Article IV process is strategic in its focus and considers medium to longer-term policy issues. This year’s review took place from 3-14 May.
The IMF Article IV consultation involved a small team of IMF staff visiting Ireland for a two-week period of consultation during which they met the Minister for Finance and Minister for Public Expenditure and Reform, Paschal Donohoe TD. The IMF team also met with the Governor of the Central Bank of Ireland, Philip Lane, and a broad range of public and private sector bodies.