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The IMF's Craig Beaumont: the IMF has lowered its forecast for growth in the Irish economy, but says it's not Ireland's own fault. Mark Stedman/Photocall Ireland

IMF lowers expectations for Irish growth – but it’s not our fault

The International Monetary Fund says a slump in the overall Eurozone, and in the UK and US, means we can’t export what we’d like.

THE INTERNATIONAL MONETARY FUND has downgraded its expectations of growth in the Irish economy for 2011 and 2012 – blaming the slower-than-expected recovery of the global economy for the move.

In a paper issued yesterday follow the completion of its last quarterly review, the IMF said it was lower its projected growth rate for the Irish economy to 0.4 per cent this year, and to 1.5 per cent in 2012 – down from 0.6 and 1.9 per cent respectively.

“The growth outlook for key trading partners – the euro area, the US and the UK – has worsened substantially,” the IMF’s report said, saying the indicators for export growth had already begun to show a slump.

“Staff have therefore lowered projections for growth in demand for Irish exports, especially in 2012, although the impact on activity will be cushioned by the high import-content of Irish exports.

“For the September World Economic Outlook, staff will lower the projected Irish growth rate to 0.4 per cent in 2011 and to about 1½ per cent in 2012.”

The IMF had previously predicted growth of 2.4 per cent in Ireland’s GDP in 2013, and of 2.9 per cent in 2014. It has not yet indicated how these figures may be revised.

The document did have good news elsewhere for Ireland, saying the reduction in bailout interest rates approved by the EU in July, but called for further measures to help bring Ireland back to the bond markets and off EU-IMF support.

Among the IMF’s other projections for this year is that the rate of unemployment would stand at 14.3 per cent, and that net exports would rise by 3.5 per cent while demand in the domestic economy would fall by about the same amount.

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