The IMF was wrong in Ireland

mutmekep · Oct 15, 2012

MF: We got effect of austerity wrong

By Ann Cahill, Europe Correspondent

Tuesday, October 09, 2012

The IMF has admitted it completely underestimated the effects of austerity on the Irish economy and believed the tax increases and spending cuts would not have cost so many jobs.

The revelation comes in three pages of academic analysis tucked away in the bodys annual report being released in Tokyo today where the IMF and the World Bank are holding their annual congress.

The report says the IMF believed that for every 100 of austerity through higher taxes and spending cuts, the effect on economic growth and unemployment would be the equivalent of 50.

But in reality the effect has been between double and three times that stripping the economy of 90 to 150 for every 100 taken out in budgets agreed with the troika.

Tom McDonnell of the independent think-tank Tasc said the report called into question the Governments budgetary strategy.

"It suggests recent budgets have actually been more damaging to the Irish economy than the Government was estimating. It would also help explain why growth has been lower over the last few years than the Government had expected and why the vaunted return to growth has failed to substantively materialise."
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the rest of the article and the report

High taxes on middle class and government spending cuts don't work

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The IMF was wrong in Ireland

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