The European Commission (EC) has said it is not sure how Ireland is raising so much money in corporation tax.

Inspectors from Brussels have finished their fourth post-bailout visit to assess the strength of the Irish economy and in a statement summarising their findings, the EC has said it still “needs to be ascertained” exactly while the corporate tax take is 60 per cent higher this year than in 2014.

“Helped by much better-than-expected growth, Ireland is well on track towards a timely and sustainable correction of the excessive deficit,” a statement from the EC said.

“The increase is being financed by much higher-than-expected government revenue.

“However, the factors underlying the very buoyant and generally volatile corporate tax receipts still need to be ascertained,” it said.

Bank lending to the private sector, and particularly to SMEs “remains subdued”, the report says, adding that “there are early signs of new lending picking up.”

“Banks need to continue with loan restructurings and with improvements in the sustainability of restructuring solutions,” it says, noting that the“introduction of new Court Rules designed to improve case management may impact favourably on the level and success of restructures.”

The report is broadly positive, but warns that banks are still burdened with non-performing loans.