Wednesday, 5 September 2012

IMF approves €0.92 loan disbursement to Irland

The International Monetary Fund (IMF) announces,
The Executive Board of the International Monetary Fund (IMF) today completed the seventh review of Ireland’s performance under an economic program supported by a three-year, SDR 19.47 billion (about €23.55 billion or about US$29.62 billion) arrangement under the Extended Fund Facility (EFF), or the equivalent of about 1,548 percent of Ireland’s IMF quota. The completion of the review enables the disbursement of an amount equivalent to SDR 0.76 billion (about €0.92 billion or about US$1.15 billion), bringing total disbursements under the EFF to SDR 15.79 billion (about €19.1 billion or about US$24.02 billion).
And on the 2012 budget IMF concludes,
The 2012 budget remains on track for the fiscal deficit target of 8.6 percent of GDP, despite a slowing in real GDP growth from 1.4 percent y/y in 2011 to a projected ½ percent in 2012 owing to weaker trading partner growth. In the year through July, the exchequer primary deficit was 0.7 percent of GDP below that in the corresponding period of 2011. Income tax, VAT, and corporation tax collections were ahead of expectations, yet this over performance was partly offset by higher health spending and unemployment benefits. The authorities have announced corrective measures for health spending. 
 And the Eurogroup,
On June 29, Euro Area leaders stated that the Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the country’s well-performing adjustment program. This positive signal helped the Irish government return to sovereign debt markets, by raising €4.2 billion of new funds in 5-year and 8-year bond financing in July, with the bulk of the issuance taken up by foreign investors. A further €1.0 billion in 15 to 35 year amortizing bonds was issued in August, tailored to meet domestic pension fund needs. 
The whole report makes it sound like Ireland is in some sort of a correction facility. The tax payers and the citizens paying the price for the government bailing out banks who financed (speculated in that is) the property boom. Little wonder the Irish people are upset by tax increases and new property taxes.

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