Minister Noonan and IMF agree on economic outlook
The Minister of Finance, Mr. Michael Noonan T.D. has today welcomed the publication by the International Monetary Fund of a range of reports which are each designed to help protect the economic and financial well-being of our citizens and all of which have aligned with the Government’s own assessments.
- Focusing on a strategic view of the Irish economy and Government policies, the Fund’s periodic Article IV Report confirms the economy’s strong underlying rebound. It sets out the views of IMF staff on a broad range of issues including the current position of the economy and its medium-to-long term prospects, medium-term fiscal policy, as well as financial and banking policy.
- The IMF have found in both the Article IV Report and the fifth post programme monitoring discussions that the rebound of the Irish economy has been exceptional. Solid job creation has reduced the unemployment rate below 8 percent. They expect the positive economic performance to continue although over the medium term, Ireland’s economy is likely to be affected by the spillover effects of the UK’s decision to leave the EU.
- The Financial System Stability Assessment (FSSA) of Ireland is based on the extensive work of the Financial Sector Assessment Programme (FSAP) mission that took place in late 2015 and early 2016. This involved meetings with the Central Bank of Ireland, the Department of Finance, the European Central Bank, and many other stakeholders in Ireland’s financial sector. It is a separate analysis of the ever improving levels of stability in Ireland’s financial services industries.
Commenting on these publications by the IMF the Minister for Finance, Michael Noonan T.D. said:
“I welcome today’s publication by the IMF of their various assessments of Ireland’s economy and financial services landscape. These consultations and assessments are an important mechanism to ensure that economies like Ireland can continue to grow while at the same time can prepare for any risks that may be emerging.”
“On this occasion, I am particularly heartened to see that the IMF’s assessment is broadly in line with the Government’s own assessment of the health of the economy and that the IMF continue to recognise the hard work of Ireland’s and the Government’s policies that together have facilitated our recent improvements. The IMF also recognises that the Government is fully committed to sound budgetary policy in the years ahead and that Ireland’s financial regulatory and supervisory frameworks have been significantly upgraded and the financial soundness of the banking sector has improved.”
28 July 2016
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Notes for Editors
The Article IV consultation is separate to the post-Programme monitoring function which has been in place since Ireland exited the Troika Programme of Assistance in December 2013. The periodic Article IV consultation, which is a requirement for IMF member countries, is more strategic in its focus and considers medium to longer-term policy issues. The return to the standard 12-month cycle for Article IV consultations is a further sign of the normalisation of Ireland’s relations with the IMF. The Article IV consultation took place in Dublin last month from 13 – 23 June. IMF Staff prepared a report based on that consultation for discussion and approval by the IMF Executive Board on Wednesday 27 July 2016.
The IMF Article IV consultation involved a small team of IMF staff visiting Ireland for consultations during which they met Minister for Finance Michael Noonan T.D. and Minister for Public Expenditure and Reform Paschal Donohoe T.D. as well as the Governor of the Central Bank of Ireland Philip Lane, senior officials and a broad range of public and private sector bodies.
IMF staff agreed with the Irish authorities that the underlying economic developments, which formed the basis of the Article IV consultation discussions, remain valid, regardless of the recent revision of the national accounts. The IMF has welcomed the CSO’s initiative to convene a high-level cross-sector consultative group to examine how best to provide additional metrics that better reflect Ireland’s underlying economic activity, to support policymaking and communications to the public.
The IMF’s Financial Sector Assessment Program (FSAP) of Ireland is one of five ongoing within the eurozone this year. The FSAP is a periodic, comprehensive and in-depth assessment of the Irish financial sector, which principally focuses on its risks and vulnerabilities. It provides input into the IMF's broader Article IV consultation. The key areas which the IMF had focused on were:
- The framework for macro-prudential policy setting including independence, transparency and accountability
- Ireland's role in the monitoring and oversight of the international funds industry
- Tools and procedures for systemic risk assessment
- Robustness of the various bank's business models
- Crisis management and preparedness arrangements
- The Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM) as well as the SRM decision making processes and alignment with domestic powers