IMF: Irish growth to continue, but at slower pace

The International Monetary Fund (IMF) has warned Ireland not to take its economic growth momentum for granted, adding while growth is set to continue it will be at a slower pace.

“The medium-term outlook remains positive. Healthy growth is expected to continue, albeit at a moderating pace,” Michele Shannon, outgoing head of IMF’s Ireland mission team said as her delegation completed its latest post-bailout review.

While Brexit represents “the most pressing and far-reaching challenge for Ireland” — particularly for tourism, export and agri- related businesses — Ms Shannon stressed the need for a broader-based tax base and stronger financial buffers to counter changes to international corporate tax policies being proposed in the US and across the EU.

She said while Ireland’s financial crisis repair work is “progressing”, it remains incomplete. One of the main domestic concerns of the IMF remains the growing housing crisis. Coinciding with fresh CSO data — showing another sharp rise, of 9.6%, in annualised residential property prices in March — the IMF said housing pressures have risen and the rapid increase in prices “calls for close monitoring”.

The delegation said the recently introduced Help-to-Buy scheme may add to demand pressures and the planned review of the programme is “welcome”.

“Growth is robust and unemployment at levels not seen in almost a decade. The challenge is to translate the recovery into a new foundation for sustainable and inclusive growth. This will require future-proofing the economy against the re-emergence of boom-bust dynamics and also well- targeted use of public resources,” Ms Shannon said.