Posted by: mulrickillion | December 22, 2011

Press Release: IMF Completes Fourth Review Under the Extended Arrangement with Ireland and Approves €3.9 Billion Disbursement

Press Release No. 11/471
December 15, 2011

The Executive Board of the International Monetary Fund (IMF) has completed the fourth review of Ireland’s performance under an economic program supported by a three-year, SDR 19.47 billion (about €23.02 billion; or US$29.91 billion) arrangement under the Extended Fund Facility (EFF), or the equivalent of about 1,548 percent of Ireland’s IMF quota. The completion of the review enables the immediate disbursement of an amount equivalent to SDR 3.31 billion (about €3.91 billion; or US$5.08 billion), bringing total disbursements under the EFF to SDR 11.05 billion (about €13.07 billion; or US$16.98 billion).

The arrangement for Ireland, which was approved on December 16, 2010 (see Press Release No. 10/496) is a part of a financing package amounting to €85 billion (about US$110.44 billion) also supported by Ireland’s European partners through the European Financial Stabilization Mechanism and European Financial Stability Facility, and bilateral loans from the United Kingdom, Sweden and Denmark, and Ireland’s own contributions.

In the wake of credit and housing booms that were followed by the worst economic crisis in its recent history, Ireland undertook an in-depth analysis, including stringent stress tests, of its domestic banks. On this basis, the Irish authorities adopted a comprehensive financial sector reform strategy in March 2011. Implementation of the first phase of the strategy to reorganize the domestic banks, strengthen their capital base, and initiate a downsizing of their balance sheets is now complete, and further reforms are underway.

The authorities are also continuing to implement a sizeable fiscal adjustment, with the budget on track for the 2011 fiscal targets. The recently announced 2012 budget includes €3.8 billion (2.7 percent of GDP) in spending and revenue measures, to reach a deficit target of 8.6 percent of GDP, and the authorities’ Medium-Term Fiscal Framework sets out the path to bring the deficit below 3 percent of GDP in 2015. These actions are helping to restore confidence as part of the government’s strategy to put the economy on a path of sustainable growth, sound public finances, and job creation.

Led by strong export performance, Ireland’s real GDP growth turned positive in the first half of 2011, reaching an annual rate of 2¼ percent in the second quarter, with annual growth of 1.1 percent projected in 2011. Weakening activity in Ireland’s trading partners is projected slow Irish exports such that real GDP growth remains around 1 percent in 2012. . . .

Press Release: IMF Completes Fourth Review Under the Extended Arrangement with Ireland and Approves €3.9 Billion Disbursement

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