IMF tells Ireland to maintain fiscal restraint in 2015

The International Monetary Fund (IMF) urged Ireland on Monday to maintain its fiscal restraint in 2015, although the country's economic rebound is in full swing.

In its latest post-bailout report, the IMF said Ireland's strong economic recovery is continuing in 2015, following robust growth of 4.8 percent in 2014.

It predicted Ireland's fiscal deficit for 2015 will be 2.3 percent of the gross domestic product (GDP), outperforming the budget targets.

But the IMF said Ireland is required to avoid a repeat of past spending overruns.

"Fiscal policy should make solid progress toward balance in the favorable economic environment and the limited fiscal space in coming years should be used to support durable growth," it said.

Ireland's 2016 target for a deficit reduction is projected at 1.7 percent of GDP.

But the IMF said the deficit reduction projected for 2016 is "too modest" considering Ireland's high public debt and strong growth.

It said any increases in public sector wages should be "gradual" and that efficiencies should be continued.

"It is critical that any unwinding of savings in public sector wages be gradual and that efficiency gains continue," it said.

The IMF warned the Irish government that more progress on bank profitability is needed and mortgage resolution efforts should be intensified. Enditem