## Ireland: Selected Issues

_IMF Staff Country Reports, June 11, 2025_

## Source details

**Canonical URL:** [Ireland: Selected Issues](https://www.imf.org/en/publications/cr/issues/2025/06/10/ireland-selected-issues-567593)

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## Bibliographic details
- Published: June 11, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229013024.002

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### 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

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## Content in this bundle

- **Ireland: Selected Issues; IMF Country Report No. 25/129; May 20, 2025**
  - [Ireland: Selected Issues; IMF Country Report No. 25/129; May 20, 2025 (Markdown version)](/-/media/files/publications/cr/2025/english/1irlea2025002-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Ireland: Selected Issues; IMF Country Report No. 25/129; May 20, 2025 (PDF)](/-/media/files/publications/cr/2025/english/1irlea2025002-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2025/06/10/ireland-selected-issues-567593_