Ireland on track for exit from bailout

Tight budgets in line with the conditions of its 85 billion euro (£72bn) bailout have helped Ireland get back on its feet.

In contrast to much of the eurozone, the country’s economy has expanded for much of the last two years, and the Fund kept its growth forecasts for 2013 and 2014 unchanged, at 1.1 per cent and 2.2 per cent respectively.

The second eurozone country to be rescued by the IMF in 2010 after Greece, Ireland received its latest chunk of aid this week.

The fund said Dublin’s fiscal consolidation was going as planned, but European help in cleaning up the banking sector would help its long-term return to debt markets.

“The policy programme of Ireland is sound and adjustment is being delivered, providing reasonably strong prospects for programme success,” the IMF said in a review of the country.

The country has consistently hit the targets under the bailout and come closer to weaning itself off emergency aid by raising five billion euros in a 10-year bond sale in March.

But Dublin has several important hurdles still to overcome, and risks remain from factors outside its control.

With domestic demand weak, much hinges on quickening growth in Ireland’s main trade partners, particularly the eurozone, the IMF said.