Ireland has emerged from the EU/IMF Programme against a background of increased market confidence in the outlook for the country’s economic performance and policy prospects.
This has been reflected in an improvement in the market’s assessment of Ireland’s credit worthiness, helping the Sovereign and domestic banks to regain access to market funding at, increasingly, more favourable rates.
General Government Deficit is on track to fall below 3 per cent of GDP by 2015 once there is continued adherence to the policies that were in place during the Programme.
This is also true for returning the banking system to a position where it can support the economy with adequate lending, and getting the rate of employment well up from the low level to which it had fallen in the crisis.
The public finances, the latest estimates suggest that the General Government Deficit for 2013 should come in below the 7.5 per cent of GDP target under the Excessive Deficit Procedure.
Projections indicate that the debt-to-GDP ratio has peaked and at a slightly lower level than previously expected.
The Irish economy is forecast to grow by 2.1 per cent this year as consumer spending and business investment increases.
In the banking sector, while liquidity and funding conditions have improved, the key issues revolve around the need for further progress in dealing with the resolution of impaired loan.
In accordance with the mortgage arrears resolution strategy and targets, the Central Bank has continued to require the banks to accelerate their work to ensure the conclusion of sustainable long-term arrangements.
The Bank is also monitoring ongoing steps to cure and resolve legacy debt problems of small firms.
Moderate wage growth and reductions to the cost base of the economy have helped restore some of the competitiveness lost during the boom.
The most recent data indicate that employment has grown strongly over the past year
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