The International Monetary Fund (IMF) expects the Irish economy to grow by 5 per cent this year, more than three times the euro zone average.

In its latest World Economic Outlook, in which it also urged governments to push through growth-focused reforms, the IMF forecast that the 19-country euro zone economy would expand 1.5 per cent this year and 1.6 per cent in 2017. In its January outlook, it predicted 1.7 per cent for both years.

The fund warned of the risk of political isolationism, notably Britain’s possible exit from the European Union, and of growing economic inequality as it cut its global growth forecast for the fourth time in a year.

In the run-up to its spring meetings in Washington this week, the IMF said chronic weakness had left the global economy vulnerable to shocks, such as sharp currency devaluations and worsening geopolitical conflicts.

Global growth

The IMF forecast global growth of 3.2 per cent this year, compared with a downwardly revised forecast of 3.4 per cent in January. The growth estimate was also lowered in July and October of last year. For 2017, the IMF said the global economy would grow 3.5 per cent, down 0.1 percentage points from its January estimate.

Its latest report cited a worsening spillover from China’s economic slowdown as well as the impact of low oil prices on emerging markets, such as Brazil. It also highlighted persistent economic weakness in Japan, Europe and the US.

The Washington-based fund also suggested that Ireland had the most to gain from a greater liberalisation of international trade. The elimination of remaining tariffs, it estimated, would trigger a 7.7 per cent jump in productivity in Ireland. – Reuters