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A delegation from the IMF, including Ajai Chopry (with blue folder), leave the Department of Finance today PA Images/Niall Carson

Irish government will miss deficit targets for 2011: IMF

Not only that, but the IMF reckons Ireland won’t even make its 2015 target for a deficit of 3 per cent of GDP.

IN ITS LATEST REPORT ON fiscal sustainability, the IMF says Ireland is unlikely to meet its deficit targets for the year.

Ireland’s deficit will hit 10.8 per cent this year – making it just one of three countries which will have budget deficits above 10 per cent. According to the four year plan, the government’s estimate for the budget deficit in 2011 is 9.1 per cent.

The IMF also expects Ireland’s deficit gap to still remain above the 3 per cent target after 2016:

For Japan and Ireland, the challenge stems from large current deficits combined with the need to run large future surpluses to service a sizable debt.

The organisation said that the ECB has bought a substantial amount of debt from Ireland, Greece and Portugal:

Although information on the country composition of ECB purchases is not publicly available, market observers believe that the ECB has preponderantly bought bonds from Greece, Ireland, and Portugal. If bonds from only these countries were bought, total ECB purchases during 2010 would have represented around 87 per cent of the fiscal deficit in these countries.

It recommended Ireland focus on “efficiency-enhancing reforms” to cut spending growth.

Yesterday, a new global economic forecast report by the IMF revised Ireland’s growth forecast downwards from 0.9 per cent to 0.5 per cent for 2011.

Read the IMF’s Fiscal Monitor report in full >

Read: IMF cuts Ireland’s growth rate forecast >