IMF cuts Irish growth forecast

The fund has praised the Central Bank's mortgage rules...

IMF cuts Irish growth forecast

Niall Carson / PA

The International Monetary Fund (IMF) has cut its growth forecast for this year from 5% to 4.9%.

It has also lowered its projected growth for the Irish economy in 2017 by 0.4% - falling from 3.6% to 3.2% in the wake of the UK's decision to leave the EU.

The IMF warned that Brexit is expected to have a negative impact on Irish banks.

"Should the repercussions be larger than anticipated, the authorities should stand ready to take remedial actions, such as a counter-cyclical fiscal policy if and when needed," the IMF said in a statement.

In its report on Ireland's financial system it added that the disruption caused by the UK's decision "could be large, but should still be manageable."

It notes that the impact that the British vote will have remains unclear, and that it will depend on the terms of the deal struck between the UK and the EU - and the amount of time that it takes for a deal to be agreed.

The Washington-based institution also praised the Central Bank's mortgage rules, it says that tighter regulations regarding deposits have been "well justified, even though credit conditions have normalised and real-estate prices are estimated to be close to equilibrium."