THE EUROPEAN COMMISSION is expected to follow its troika partners in releasing a generally-positive review of Ireland’s EU/IMF target progress today.
The second quarter performance review is expected to say that Ireland is meeting the targets laid down in the bailout programme and should hit the 3 per cent deficit level by 2015, according to RTÉ’s Tony Connolly on Morning Ireland today.
In the meantime, Ireland faces at least three consecutively tough budgets to hit that deficit target.
Minister for Finance Michael Noonan has already suggested that the spending cuts carried in the next budget will reach about €4 billion.
The IMF said last week that Ireland was making progress in implementing austerity measures and restructuring the financial sector. However, the organisation warned that continued reform was essential to support the recovery of Ireland’s economy – and market confidence in Ireland.
Yesterday, ECB President Jean-Claude Trichet said Ireland is building its credibility and creditworthiness.
“We can do nothing but encourage Ireland in this path,” Trichet said. “Improving confidence is, per se, an element of growth activation – which is, of course, of extreme importance.”
Following its latest quarterly report on Ireland, the IMF said yesterday that it was projecting a lower growth rate for Ireland this year of 0.4 per cent than it had earlier forecast. Growth next year is predicted to reach 1.5 per cent.
The IMF said that the growth outlook for Ireland’s key export markets, including the US and UK, had “worsened substantially”.
The organisation also projected that unemployment in Ireland would remain at 14.3 per cent for this year and forecasts that while net exports will rise by 3.5 per cent, domestic demand will fall by around the same amount.
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