The International Monetary Fund (IMF) on Monday approved the disbursement of $1.17 billion to Ireland under the bailout program, saying that the country has advanced reforms and continued steadfast policy implementation even as economic growth slowed.
The lender, meanwhile, warned that the Irish government should defer any additional fiscal consolidation to 2015 to protect the recovery, if next year's growth were to disappoint.
The decision followed the completion of the eighth review of Ireland's economic performance under a program supported by a three-year loan arrangement under the Extended Fund Facility. The latest batch brings total disbursements under the program to $25.49 billion.
The arrangement is part of a financing package amounting to $111.9 billion or EUR 85 billion, which is also supported by the European Financial Stabilization Mechanism and European Financial Stability Facility, bilateral loans from Denmark, Sweden, and the United Kingdom, and Ireland's own contributions.
The IMF forecasts that Ireland would comfortably meet its 8.6 percent deficit target for 2012 despite health overruns and higher social welfare spending owing to high unemployment.
The economy is expected to record a gradual recovery, with growth of 1.1 percent in 2013 and 2.2 percent in 2014, with public debt expected to peak at 122 percent of GDP in 2013, the IMF said.
"All program targets have been met and a range of fiscal, financial, and structural reforms are in train," IMF's First Deputy Managing Director and Acting Chair David Lipton said.
"The Medium-Term Fiscal Statement set out a phased path for considerable further fiscal consolidation to bring the budget deficit below 3 percent by 2015."
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