The government may need do more "fiscal tightening" this year according to the European Commission.
"The growth outlook could continue to deteriorate significantly if the challenges in the peripheral euro area are not addressed and more of Ireland's main trading partners slide into a recession," the Commission said, in documents supplied to German lawmakers by the German finance ministry, as it backed the latest loan disbursement to Ireland.
"A further deterioration of the macroeconomic backdrop could require additional fiscal tightening later in the year."
The Commission, which in the report urged Ireland to reassess its deficit forecasts later this year, said that the initial asset sales plan provided by the government hadn't been sufficiently ambitious enough, and had been revised.
The Commmission produced the report after its latest mission to Ireland last month.
Bloomberg