Belfast Telegraph

IMF: Long road back for Republic

By Brendan Keenan

The Republic's economy will recover only slowly from the crash, with unemployment still likely to be around 9% in 2015, a report by the International Monetary Fund (IMF) said.

The economy is expected to contract slightly again this year. The document does not give forecasts for next year - where several analysts are now predicting growth of around 2.5%.

In its regular review of the Irish economy published yesterday, the IMF said it would be five years before the economy reaches 3.5% growth.

This is significantly less than government projections of growth of more than 4% from 2012.

The IMF said: "Exports will lead the recovery. But spillover into the domestic economy will be limited because of exporters' heavy reliance on imports, their tendency to employ capital-intensive processes, and the sizeable repatriation of profits by multi-nationals."

The economy will also suffer from the unwinding of debts run up during the boom, pressure on prices and restraint on wages. A shortage of credit, with banks presently so risk averse, is also seen as hampering growth, at least for the next 18 months.

The IMF report follows a prediction that the Republic's economy will bounce back dramatically in 2011.