IMF praises Ireland's 'steadfast' progress on bailout deal

(DUBLIN) - The International Monetary Fund is pleased with Ireland's "strong" efforts to stabilise its economy, it said Friday, but it added that weak growth was a cause for concern in the debt-wracked nation.

The Washington-based body said Ireland, which was forced to ask the IMF and EU for an 85-billion-euro ($107 billion) bailout in November 2010, had been "steadfast" in its implementation of reforms attached to the rescue deal.

"Fiscal, financial, and structural reforms are advancing as envisaged," the IMF said in its sixth review of the progress of Ireland, which has brought in a series of tax hikes and spending cuts as part of the bailout deal.

But the IMF warned: "Renewed tensions in the euro area have driven up Irish bond spreads, while growth remains weak and unemployment high."

The government forecasts growth of 0.7 percent this year, while unemployment stood at 14.3 percent in May.

"Risks to Ireland's programme would be most effectively managed within a broader European plan to stabilise the euro area," the IMF added.

It released a 1.4 billion euro loan installment to Ireland on Wednesday, bringing the IMF's total disbursements under the 2010 loan to about 18.2 billion euros ($22.8 billion).

Ireland's formerly-proud "Celtic Tiger" economy was brought to the brink of collapse after a property bubble burst, forcing the government to rescue the nation's major banks and then seek a bailout for itself.

Irish Prime Minister Enda Kenny said on Tuesday that his government was seeking a "re-engineering" of its bank debt, with a longer pay-back time and lower interest rate.