Credibility hit by split in growth forecasts

THE divergence in growth rate forecasts for the economy between those of the Government and the International Monetary Fund and EU is damaging the nation’s credibility.

Yesterday, the IMF warned that Ireland faced significant risks that could affect its ability to repay €70 billion in aid loans.

The EU is giving Ireland until 2015 to get its budget deficit below the Stability and Growth Pact limit of 3% of GDP, but the IMF said it forecast the deficit to reach 5.1% of GDP by 2014 and 4.8% by 2015, unless more cuts and tax increases are imposed.