Defer cuts if economy slows, says IMF

Government cost cutting should be deferred for a year if the economy does not grow as expected next year, the IMF has said.

It also says in a stark warning that the effects of austerity, the amount of private debt and the banks not being able to lend, continues to threaten a revival of the domestic economy.

There is a significant risk that the global economy will also deteriorate, and that Irish banks could need more money, they say, while also insisting that the EU must live up to its promises of helping improve the level of debt due to reach 122% next year.