Ireland cuts deficit to 7.6%, now ahead of schedule

22nd April 2013, Comments 0 comments

Ireland slashed its public deficit to 7.6 percent of output last year from 13.4 percent in 2011, official statistics showed on Monday as the eurozone country works to emerge from a rescue programme backed by the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF).

The Central Statistics Office figure was good news for a country that has been supported by foreign assistance since late 2010.

The government of Prime Minister Enda Kenny estimated in its last forecast that the deficit would amount to 8.2 percent of gross domestic product for 2012, and has thus now almost reached its end-2013 target of 7.5 percent of GDP.

On a less positive note however, Ireland's public debt grew to 117.6 percent of GDP last year, from 106.4 percent in 2011, the statistics showed.

EU nations are supposed to have deficits of no more than 3.0 percent of GDP, and a debt ceiling of 60 percent.

The former "Celtic Tiger" economy stumbled after banks were hit by huge amounts of bad loans to the real-estate sector, which went bust amid the 2008-2009 global economic meltdown, and the government stepped in to keep them afloat.

In 2010, Dublin had to ask in turn for a rescue package worth 85 billion euros ($111 billion) from the EU, ECB and IMF in exchange for austerity measures designed to cut a deficit that leapt that year to 30.8 percent of GDP.

The economy has begun to recover since then however, putting Ireland in a much better position than other eurozone countries such as Greece and Portugal which also needed to be bailed out but which remain stuck in recession.

In early February, Ireland reached an agreement with the ECB on how to re-structure massive debts of the former Anglo Irish Bank which allowed the government to cut its own financing need by 20 billion euros over the coming decade.

© 2013 AFP

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