Ireland on schedule to exit bailout

Rescued by Europe and the IMF in late 2010, Ireland has consistently hit the targets set under its bailout and closed in on getting off emergency assistance last month by raising E5bn in a landmark 10-year bond sale.

The IMF said the sale was another key step towards restoring full market access but cautioned again that Ireland’s prospects hinged on a recovery in the European economy and further help by European leaders to ease the burden of Ireland’s bank debt.

“Recent positive financial market and real sector developments support Ireland’s capacity to exit the EU-IMF supported programme at year-end,” the IMF, one of Dublin’s so-called troika of lenders, said in its latest review of Ireland’s progress.

“However, growth is expected to remain sluggish in 2013 and the outlook for gradual recovery over the medium term remains highly uncertain.”

The Washington-based body kept its growth forecasts for the next two years unchanged, predicting the economy would expand by 1.1 per cent this year and 2.2 per cent in 2014 – the first time in six reviews that it has not marked down growth for 2013.

It said positive indicators were emerging for the revival of domestic demand, employment, and credit extension.

Ireland’s economy has grown for the last two years but it contracted in the third quarter of 2012 and was flat in the fourth as weak external demand weighed on exports.