IRELAND can afford a ‘bigger state’ with greater levels of overall public spending and needs to take action to boost the supply of affordable housing, the IMF has said. While it backs higher public spending the IMF says taxation will have to rise to pay for it, but not until the economy is fully recovered from Covid. A report following the mission says spending here lags peer countries as a result of what Khaled Sakr called “past efforts to reduce the scale of expenditure”. Those efforts notably included the austerity conditions attached to the EU / IMF bailout a decade ago. The hit to the more labour intensive domestic economy from the pandemic is large however, and it remains vulnerable, the report said.

Source: Irish Independent May 12, 2021 12:11 UTC