The International Monetary Fund on Monday approved the payout of a $4.33 billion loan to Ireland, the latest installment in a three-year $30.23-billion program to support the country amid the tough financial reforms.
After the fund’s executive board approved the disbursement, David Lipton, IMF First Deputy Managing Director, said in a statement: “The Irish authorities have continued strong implementation of their program despite deteriorating external conditions,” Reuters reported.
The IMF program was approved in December 2010 as part of a larger $114 billion financing package supported by the European Financial Stabilization Mechanism, the European Financial Stability Facility, loans from Britain, Sweden and Denmark and Ireland’s own contributions.
After three years of contraction, Ireland grew an estimated 1 percent in 2011, was able to meet its fiscal consolidation targets with room to spare and advanced structural reforms to support growth and job creation, Lipton said.
“At the same time, the challenges Ireland faces have intensified since the outset of the program, with growth expected to ease to about 0.5 percent in 2012 owing to a slowing in trading partner activity,” Lipton said.
“The Irish authorities have responded by raising the fiscal consolidation effort adopted in Budget 2012, and the budget remains on track to meet an unchanged general government deficit target of 8.6 percent of GDP. If growth should weaken further, the automatic stabilizers should be allowed to operate to help avoid jeopardizing the fragile recovery,” he said.
The IMF has now disbursed $21.49 billion to Ireland under the so-called Extend Fund Facility.
“Continued strong implementation of fiscal consolidation, and financial and structural reforms by the Irish authorities will be critical for the government to regain timely and substantial access to market funding,” Lipton said.
“Continued strong European support remains essential to the effectiveness of the authorities’ efforts,” he added.