Government advised to take the axe to public spending in the years ahead

THE International Monetary Fund (IMF) has said the Government should focus on cuts in public sector pay and social welfare payments as it looks to drive economic recovery.

Outlining its case in its latest report on the Irish economy, it said spending cuts offer the quickest and most efficient route to solving the current fiscal crisis dogging the country.

It accepts some scope exists to raise taxes further, especially if it is done to broaden the tax base rather than hit those already in the tax net.