Ireland's economy is forecast to grow 2.3 percent in 2011 after escaping a painful recession earlier this year, the International Monetary Fund said on Wednesday.
The severity of the recession means the eurozone nation's gross domestic product is still expected to shrink by 0.6 percent this year, the IMF said, adding that Irish GDP should grow 2.5 percent in 2012.
Ireland became the first eurozone member country to plunge into a recession, in the first half of 2008, slammed by the global financial crisis, a domestic property market meltdown and soaring unemployment.
"Recovery prospects are weighed down by the ongoing correction of pre-crisis imbalances," the IMF said in a report on Ireland.
However, it added: "The authorities' aggressive measures have helped gain policy credibility and stabilize the economy."
The Irish government has pumped huge sums of money into crisis-hit banks and set up the National Assets Management Agency (NAMA), a state-run "bad bank" that is designed to soak up billions of euros of their toxic assets.
At the same time, the government has sought to slash spending, in line with many other European countries, to curb its huge public deficit as it seeks to maintain its credibility on global financial markets.
"After a severe decline in late 2008 and 2009 -- amounting to more than 15 percent contraction of the nominal GDP -- the Irish economy has now stabilized and growth resumed in the first quarter this year," the IMF said.
"The Irish authorities were among the first in Europe to undertake serious fiscal consolidation, with the introduction of an income levy and sizeable cuts to public sector pay and social welfare benefits.
"This early action helped restore confidence and a strong export performance has lifted growth prospects," the IMF added.
Copyright 2010 AFP Global Edition
