IMF国际货币组织全球-Ireland_2019-Article-IV-Consultation_76页_2mb

2019 Article IV Consultation with Ireland Summary

Core Content

The 2019 Article IV consultation with Ireland by the IMF highlighted the country's strong economic expansion, supported by multinational sector-led net exports and robust domestic demand. The consultation concluded on June 14, 2019, with the Executive Board expressing confidence in Ireland's economic performance while emphasizing the need for continued policy efforts to address structural and external challenges.

Main Views

Economic Performance

• Growth: Ireland's real GDP growth reached 6.8% in 2018, driven by the multinational sector. Domestic demand expanded by 3.3% in the same year.
• Unemployment: The unemployment rate fell below 6%, with net inward migration contributing to employment growth.
• Inflation: Inflation has been gradually rising due to sustained demand pressures and the diminishing effects of past sterling depreciation, reaching 2% over the medium term.
• Public Finances: Public debt declined to below 65% of GDP, and public finances are expected to continue improving.

Outlook and Risks

• Growth Projection: Growth is expected to slow to about 4% in 2019 and gradually converge to a potential rate of close to 3% over the medium term.
• Brexit Risk: A no-deal Brexit remains the key downside risk, alongside global protectionism and changes in corporate tax planning.
• Current Account: The current account surplus is projected to decline to 4.6% of GDP by 2024, mainly due to the impact of multinational activities.

Financial Sector

• Banking Sector: The banking sector is well capitalized and liquid, but profitability is under pressure. Nonperforming loans have declined, though remain high.
• Credit Growth: Credit to the economy has recently started to expand, with large enterprises benefiting more than SMEs.
• Macroprudential Tools: The use of macroprudential tools has been proactive, and the expansion of the toolkit with systemic risk buffers and debt-based measures is encouraged.

Structural Challenges

• Housing Supply: Housing prices continued to rise, but at a slower pace. Supply is beginning to respond to demand, and efforts to increase housing supply should continue.
• Productivity and Skills: Productivity in domestic firms needs to be boosted through innovation, training, and infrastructure investments.
• Gender Gap: Measures to increase female employment, such as the affordable child care program, are encouraged.

Key Policies and Recommendations

Fiscal Policy

• Fiscal Consolidation: Accelerate fiscal consolidation to alleviate demand pressures and build buffers against risks.
• Tax Reforms: Broaden the tax base and improve the efficiency of the income tax system. Consider saving additional corporate tax revenue and enforcing spending limits.
• Public Investment: Ensure value-for-money in public infrastructure investments and support the Rainy-Day Fund for unforeseen events.
• Climate Commitments: Develop an ambitious strategy to meet Ireland's climate change targets.

Financial Sector Policy

• Nonperforming Loans: Continue efforts to reduce nonperforming loans to target levels.
• Macroprudential Tools: Expand the use of macroprudential instruments, including systemic risk buffers and debt-based measures.
• Non-Bank Sector: Monitor risks in and spillovers from the growing non-bank sector and improve data collection on it.
• AML/CFT: Strengthen the anti-money laundering and counter-terrorism financing framework.

Structural Reforms

• Housing Supply: Expand housing supply and rationalize building regulations to meet demand.
• Education and Training: Align education and training programs with the labor demand for high-skilled, high-paying jobs.
• Gender Equality: Address the gender pay gap and ensure equal job opportunities for women.

Key Information

• Economic Growth Drivers: Multinational sector net exports and domestic demand.
• Fiscal Indicators: Public debt decreased to 65% of GDP, and the budget was balanced in 2018.
• Employment and Wages: Unemployment rate reached historical lows, and wage growth accelerated.
• Brexit Impact: No-deal Brexit is a significant risk, with potential fiscal stimulus being considered.
• IMF Engagement: The IMF team met with key officials, parliamentarians, and private sector representatives, and held a teleconference with the ECB's SSM staff.

Tables and Data Highlights

Selected Economic Indicators, 2016–24

• Real GDP: Growth from 4.9% in 2016 to 6.8% in 2018, projected to slow to 2.7% in 2024.
• Unemployment Rate: Declined from 8.4% in 2016 to 5.8% in 2018, expected to fall to 4.9% in 2024.
• Public Debt: Fell from 73.5% of GDP in 2016 to 48.0% in 2024.
• Current Account Surplus: Increased to 9.1% of GDP in 2018, projected to decline to 4.6% by 2024.

Fiscal Developments

• Overall Balance: Improved from -0.7% in 2016 to 0.7% in 2024.
• Primary Balance: Increased from 1.6% in 2016 to 1.8% in 2024.
• Structural Balance: Improved from -1.5% to 0.7% of potential GDP.

Monetary and Financial Indicators

• Bank Credit to Private Sector: Growth from -7.6% in 2016 to -3.4% in 2018.
• Government Bond Yield: Increased from 0.7% in 2016 to 1.1% in 2018.

Conclusion

The IMF welcomed Ireland's strong and broad-based growth, emphasizing the need for continued fiscal discipline, financial sector stability, and structural reforms to address long-term challenges. The consultation highlighted the importance of preparing for Brexit, improving productivity, and ensuring sustainable public finances.