{
  "title": "IMF Executive Board Concludes 2019 Article IV Consultation with Ireland",
  "publication": "IMF News, June 17, 2019",
  "sourceUrl": "https://www.imf.org/en/news/articles/2019/06/14/pr19221-ireland-imf-executive-board-concludes-2019-article-iv-consultation",
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  "summary": "Real GDP growth in 2018: 6.8 percent, boosted by multinational sector‑led net exports.",
  "publishDate": "2019-06-17",
  "sections": [
    {
      "heading": "Economic performance and recent developments",
      "content": "- Real GDP growth in 2018: 6.8 percent, boosted by multinational sector‑led net exports.\n- (Modified) domestic demand expansion in 2018: 3.3 percent.\n- Unemployment: pushed below 6 percent in 2018 with strengthening net inward migration.\n- Inflation: gradually rising due to sustained demand pressures and dissipating effects of past sterling depreciation.\n- Public finances: improved further, supported by strong output growth and abundant unforeseen corporate income tax proceeds.\n- Public debt: declined by almost 4 percentage points to below 65 percent of GDP (105 percent of GNI).\n- Current account surplus (2018): widened moderately to 9.1 percent of GDP, mainly reflecting activities of multinationals.\n- Banking sector: downsized, well capitalized and liquid; profitability under pressure; credit to the economy has only recently begun to expand.\n- Nonperforming loans: declined but remain high.\n- Nonbank financial sector: investment funds and other financial intermediaries continue to grow rapidly, lifting the overall size of Ireland’s financial sector above its pre‑crisis level.\n- Household balance sheets: improved on the back of strong income growth.\n- Housing market: housing prices continued to grow, but at a slower pace amid signs that the supply of housing has begun to respond to rising demand."
    },
    {
      "heading": "Outlook and projections",
      "content": "- Outlook conditionality: broadly positive provided Brexit proceeds in an orderly manner.\n- Growth projections:\n  - 2019: projected to slow to about 4 percent as one‑off factors driving MNEs’ net exports dissipate.\n  - Medium term: projected to gradually converge to a potential rate of close to 3 percent, thereby closing the positive output gap.\n- Employment and labor market:\n  - Further employment growth will tap foreign labor inflows and reduce unemployment to about 5 percent.\n  - This employment growth is expected to support earnings and private consumption.\n- Inflation: headline inflation expected to reach 2 percent over the medium term.\n- Public finances: estimated to improve further over the medium term.\n- External position: current account surplus projected to subside to below 5 percent of GDP over the medium term."
    },
    {
      "heading": "Executive Board assessment — risks and policy priorities",
      "content": "- Main external downside risks: a no‑deal Brexit, escalation of global protectionism, and adapting to ongoing international tax changes.\n- Fiscal policy guidance:\n  - Accelerate fiscal consolidation to alleviate demand pressures and build buffers given the advanced cyclical position and external risks.\n  - Save additional corporate tax revenue.\n  - Broaden the tax base to reduce dependency on uncertain revenues.\n  - Reform personal income taxation to make it more efficient.\n  - Enforce spending limits and ensure value‑for‑money in public infrastructure investments.\n  - Support establishing the Rainy‑Day Fund as a fiscal tool for unforeseen events.\n  - Commit to using all proceeds from financial sector divestments to reduce public debt.\n- Brexit contingency:\n  - If a no‑deal Brexit materializes, let automatic fiscal stabilizers operate freely and provide targeted support to hard‑hit sectors.\n  - A fiscal stimulus may be called for, depending on the severity of the downturn in the broader economy.\n  - In case of a sharp credit contraction, the countercyclical capital buffer could be released.\n- Financial sector and macroprudential policy:\n  - Continue efforts to improve bank asset quality; prioritize NPL reduction via accelerated legal processes, creditor‑borrower engagement, and enhanced supervisory efforts.\n  - Welcome the proactive use of macroprudential policy tools and endorse expanding the toolkit with a systemic risk buffer and debt‑based measures.\n  - Encourage further strengthening of the AML/CFT framework.\n- Nonbank financial intermediation:\n  - Improve data collection on the large and fast‑growing nonbank sector, closely monitor risk build‑up, and develop system‑wide stress testing.\n  - Emphasize continued engagement in international cooperation given the sector’s global reach.\n  - Maintain close cooperation with the EU and the U.K. to avoid cliff‑edge risks related to Brexit.\n- Structural reforms and labor market:\n  - Address key structural bottlenecks to growth.\n  - Continue efforts to boost housing supply, including rationalizing building regulations.\n  - Boost productivity in domestic firms through direct funding of innovation, employee training programs, and infrastructure investments.\n  - Increase female employment, notably through the affordable child care program.\n  - Further align educational paths with business demand for high‑skilled jobs.\n- Other recommendations:\n  - Continue implementing the international tax reform agenda.\n  - Develop an ambitious strategy to achieve Ireland’s climate change commitments.\n  - Strengthen the long‑term financial soundness of the Social Insurance Fund."
    },
    {
      "heading": "Selected economic indicators and key statistics (2016–24, as presented)",
      "content": "- Population (2018, millions): 4.8\n- Per capita income (euros): 37,545\n- Quota (as of Apr. 30, 2018, millions of SDRs): 3,449.9\n- At‑risk‑of‑poverty rate 1/: 16.6\n- Output and demand (annual percentage change, constant prices, unless otherwise indicated):\n  - Real GDP: 2016: 4.9; 2017: 7.2; 2018: 6.8; 2019: 4.1; 2020: 3.4; 2021: 3.1; 2022: 2.9; 2023: 2.7\n  - Domestic demand: 2016: 22.7; 2017: -13.0; 2018: 4.4; 2019: 3.8; 2020: 3.3; 2021: 3.0; 2022: 2.8\n  - Public consumption: 2016: 3.5; 2017: 3.9; 2018: 6.4; 2019: 1.7; 2020: 2.5; 2021: 2.1; 2022: 2.3\n  - Private consumption: 2016: 3.7; 2017: 1.9; 2018: 2.4\n  - Gross fixed capital formation: 2016: 53.2; 2017: -30.2; 2018: 7.8; 2019: 5.9; 2020: 5.2\n  - Exports of goods and services: 2016: 7.7; 2017: 8.9; 2018: 4.6; 2019: 4.3; 2020: 4.2\n  - Imports of goods and services: 2016: 18.5; 2017: -9.3; 2018: 4.5\n  - Potential growth: 2016: 8.5; 2017: 6.0; 2018: 3.2\n  - Output gap: 2016: 0.7; 2017: 1.5; 2018: 1.3; 2019: 1.1; 2020: 0.5; 2021: 0.2; 2022: 0.0\n- Prices:\n  - Inflation (HICP): 2016: -0.2; 2017: 0.3; 2018: 1.2\n  - GDP deflator: 2016: -0.8; 2017: 0.4; 2018: 1.4\n- Employment and wages:\n  - Employment (ILO definition): 2018: 3.6\n  - Unemployment rate (percent): 2016: 8.4; 2017: 6.7; 2018: 5.8; 2019: 5.4; 2020: 5.0\n- Public finance (percent of GDP):\n  - Revenue: 2016: 27.0; 2017: 26.1; 2018: 25.8; 2019: 25.9; 2020: 25.5; 2021: 25.3; 2022: 24.7; 2023: 24.6; 2024: 24.5\n  - Expenditure: 2016: 27.6; 2017: 26.3; 2018: 26.0; 2019: 25.0; 2020: 24.2; 2021: 24.0; 2022: 23.8\n  - Overall balance: 2016: -0.7; 2017: -0.3\n  - Primary balance: 2016: 1.6\n  - Structural balance (percent of potential GDP): 2016: -1.5; 2017: -0.5; 2018: 0.1; 2019: 0.6\n  - General government gross debt: 2016: 73.5; 2017: 68.6; 2018: 64.8; 2019: 62.3; 2020: 58.8; 2021: 57.0; 2022: 54.0; 2023: 51.1; 2024: 48.0\n  - General government net debt: 2016: 59.8; 2017: 55.8; 2018: 53.1; 2019: 51.5; 2020: 49.5; 2021: 46.7; 2022: 44.1; 2023: 41.2\n- Balance of payments and external indicators:\n  - Trade balance (goods): 2016: 38.9; 2017: 36.7; 2018: 34.5; 2019: 32.8; 2020: 32.0; 2021: 31.7; 2022: 31.5; 2023: 31.4\n  - Current account balance: 2016: -4.2; 2017: 9.1; 2018: 7.9; 2019: 6.9; 2020: 6.3\n  - Gross external debt (excl. IFC): 2016: 294.4; 2017: 255.0; 2018: 221.3; 2019: 209.7; 2020: 200.3; 2021: 191.5; 2022: 183.3; 2023: 176.3; 2024: 169.8\n- Saving and investment balance:\n  - Gross national savings: 2016: 33.7; 2017: 33.2; 2018: 35.0; 2019: 35.6; 2020: 35.2; 2021: 34.9; 2022: 34.6; 2023: 34.3; 2024: 33.9\n  - Private sector saving: 2016: 32.4; 2017: 33.3; 2018: 34.0; 2019: 33.5; 2020: 33.1; 2021: 32.7; 2022: 32.3; 2023: 31.9\n  - Gross capital formation: 2016: 37.9; 2017: 24.8; 2018: 25.1; 2019: 26.5; 2020: 26.9; 2021: 27.1; 2022: 27.2; 2023: 27.4; 2024: 27.5\n- Memorandum items:\n  - Nominal GDP (€ billions): 2016: 272.9; 2017: 293.7; 2018: 318.3; 2019: 335.4; 2020: 351.8; 2021: 369.4; 2022: 387.7; 2023: 405.9; 2024: 425.0\n\nItalic: IMF Executive Board summary of the Article IV consultation with Ireland concluded on June 14, 2019.\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Ireland and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.imf.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2019/06/14/pr19221-ireland-imf-executive-board-concludes-2019-article-iv-consultation"
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    "Published: June 17, 2019",
    "Real GDP growth in 2018: 6.8 percent, boosted by multinational sector‑led net exports.",
    "(Modified) domestic demand expansion in 2018: 3.3 percent.",
    "Unemployment: pushed below 6 percent in 2018 with strengthening net inward migration.",
    "Inflation: gradually rising due to sustained demand pressures and dissipating effects of past sterling depreciation.",
    "Public finances: improved further, supported by strong output growth and abundant unforeseen corporate income tax proceeds.",
    "Public debt: declined by almost 4 percentage points to below 65 percent of GDP (105 percent of GNI*).",
    "Current account surplus (2018): widened moderately to 9.1 percent of GDP, mainly reflecting activities of multinationals.",
    "Banking sector: downsized, well capitalized and liquid; profitability under pressure; credit to the economy has only recently begun to expand.",
    "Nonperforming loans: declined but remain high.",
    "Nonbank financial sector: investment funds and other financial intermediaries continue to grow rapidly, lifting the overall size of Ireland’s financial sector above its pre‑crisis level.",
    "Household balance sheets: improved on the back of strong income growth.",
    "Housing market: housing prices continued to grow, but at a slower pace amid signs that the supply of housing has begun to respond to rising demand.",
    "Outlook conditionality: broadly positive provided Brexit proceeds in an orderly manner.",
    "Growth projections:",
    "Employment and labor market:",
    "Inflation: headline inflation expected to reach 2 percent over the medium term.",
    "Public finances: estimated to improve further over the medium term.",
    "External position: current account surplus projected to subside to below 5 percent of GDP over the medium term.",
    "Main external downside risks: a no‑deal Brexit, escalation of global protectionism, and adapting to ongoing international tax changes.",
    "Fiscal policy guidance:",
    "Brexit contingency:",
    "Financial sector and macroprudential policy:",
    "Nonbank financial intermediation:",
    "Structural reforms and labor market:",
    "Other recommendations:",
    "Population (2018, millions): 4.8",
    "Per capita income (euros): 37,545",
    "Quota (as of Apr. 30, 2018, millions of SDRs): 3,449.9",
    "At‑risk‑of‑poverty rate 1/: 16.6",
    "Output and demand (annual percentage change, constant prices, unless otherwise indicated):",
    "Prices:",
    "Employment and wages:",
    "Public finance (percent of GDP):",
    "Balance of payments and external indicators:",
    "Saving and investment balance:",
    "Memorandum items:",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
    "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)",
    "[Ireland and the IMF](http://www.imf.org/external/country/IRL/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.imf.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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