Ireland: Selected Issues
IMF Staff Country Reports, June 11, 2025
Source details
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- Ireland: Selected Issues
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Bibliographic details
- Published: June 11, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229013024.002
Executive summary and main proposals
- Proposes strengthening Ireland’s national fiscal framework by:
- Establishing a prudent medium-term debt anchor through calibration of corporate income tax shocks and simulation of possible debt trajectories.
- Introducing an operational expenditure rule based on multi-year expenditure ceilings.
- Expenditure ceilings are calibrated to stabilize debt at the anchor level while accounting for the economy’s cyclical positions.
- The analysis abstracts from discretionary revenue measures and defines expenditure limits as net of such measures, consistent with the definition of the previous government’s net spending rule.
- Recommends regular reviews to ensure fiscal rules remain well-calibrated to evolving macroeconomic and fiscal conditions; adjustments may be necessary as macro-fiscal conditions and structures evolve.
- Notes that defining ceilings in terms of growth rates has benefits of ease of communications and continuity, and that with full compliance the two approaches are equivalent.
Analytical approach and calibration
- Debt anchor determination:
- Calibrates corporate income tax shocks and uses simulated debt trajectories to establish a prudent medium-term debt anchor.
- Operational rule design:
- Multi-year expenditure ceilings are proposed as the operational instrument guiding the annual budget process.
- Ceilings are defined net of discretionary revenue measures.
- Treatment of cyclical positions:
- Ceilings are adjusted to account for the economy’s cyclical positions to preserve debt-stabilizing properties.
Policy recommendations and governance
- Adopt a prudent medium-term debt anchor based on the simulated debt trajectories informed by corporate income tax shock calibration.
- Implement multi-year expenditure ceilings as an operational rule to guide annual budgets, defined net of discretionary revenue measures.
- Conduct regular reviews of fiscal rules to maintain calibration with macroeconomic and fiscal conditions; make adjustments as structures and conditions evolve.
- Consider defining ceilings in growth-rate terms for improved communication and continuity, noting equivalence with other formulations under full compliance.
Scope, limitations, and definitions
- Analysis abstracts from discretionary revenue measures; expenditure limits are defined net of such measures.
- The expenditure limits’ net-of-discretionary-revenue definition is consistent with the previous government’s net spending rule.
Subjects and keywords
- Subject: Balance of payments, Expenditure, Expenditure efficiency, Foreign direct investment, Health care spending
- Keywords: BENCHMARKING public spending efficiency, debt anchor, debt fan, efficiency frontier, Expenditure efficiency, Foreign direct investment, Global, Health care spending, major spending category, prudent debt anchor
Content in this bundle
- Ireland: Selected Issues; IMF Country Report No. 25/129; May 20, 2025