IMF publishes 8th Review of Ireland

Posted on Friday, 26 July 2013

The IMF has just published the 8th Review and Country Report on Ireland.  The report outlines the substantial challenges facing Ireland in 2013.  Growth projections for our trading partners have been revised down and domestic demand is expected to contract again in 2013.  The IMF also notes that if growth projections for 2013 were to disappoint, any additional fiscal consolidation should be deferred to 2015 to protect the recovery.

It is clear from the report that Government's current approach to resolving the crisis is not working and that a new approach is required.  The promised outcomes in terms of employmentand growth have not materialised the the IMF report points to the significant challenges facing Ireland in 2013 and beyond.  the report also highlights that Ireland's projections in terms of growth are on a best case scenario assuming that there is growth in our trading partners.  Social Justice Ireland has argued that a new approach is required and part of this new approach should be investment to promote job creation.  Continued austerity will simply run down the economy further.

Some of the main points in the report are:

  • Employment fell by 0.8 per cent in 2012
  • Without emigration Ireland’s unemployment rate would stand at 20 per cent
  • One third of young people in the labour force are unemployed
  • Unemployment is projected to decline only gradually over the medium term
  • The overrun in the Social Protection Budget is due to unemployment remaining above Government projections
  • The report notes the need for the increased use of generic drugs in order to generate savings on drug costs in the Health budget
  • Domestic demand dropped by 3.5 per cent in 2012
  • The volume of exports fell by 2.25 per cent in 2012 compared with 2011
  • Bank lending remains weak and interest rates for SME loans are well above the Euro Area average

Social Justice Ireland has consistently argued for Government to invest in the economy in order to boost domestic demand and promote job creation.  Without investment there will be no jobs, without jobs there will be no recovery and without recoverey Ireland will be stuck in austerity for the forseeable future.  At present there is no strategy to deal with the unemployment crisis, and as noted by the IMF, without emigration our unemployment rate would stand at 20 per cent.  Social Justice Ireland outlined a €7bn investment programme our fully costed alternative Budget for 2013 and has been calling for the introduction of a Part-Time Job Opportunities Programme which could take 100,000 long-term unemployed people off the live register since the beginning of the unemployment crisis.