Ireland has enough money but not enough houses to take in Ukrainian refugees, the International Monetary Fund (IMF) said.
The IMF has also trimmed Ireland’s growth forecasts, saying prices will rise faster than expected as the war in Ukraine throws back Europe’s recovery.
Around 25,000 Ukrainian refugees have arrived in Ireland since the Russian invasion on February 24, with the government discussing a €400 monthly payment for households that agree to take in people fleeing the war.
“Ireland certainly has the fiscal space to cope with this pressure from the refugee crisis,” said Alfred Kammer, director of the IMF’s Europe Department.
“I think a key issue that Ireland faces, as does many other European economies, is that the housing supply is already quite under pressure and that puts a lot of emphasis on actually finding housing for refugees.
“I think that’s a problem in the short term. And I think that’s something that has to be dealt with from country to country.
“We have been campaigning for some time, including in Ireland, to increase the supply of housing, for the entire population.”
The Washington-based fund released its regional economic outlook for Europe yesterday and said some major European economies could slip into a “mild technical recession” this year as the war amplifies pandemic-induced declines in consumption and investment.
Ireland is expected to be the fastest growing EU economy in 2022, with gross domestic product growing 5.2 percent, down 50 basis points from previous forecasts. In comparison, growth in the euro zone this year is 2.8 percent.
Irish GDP growth is expected to slow slightly to 5 per cent in 2023 and 4 per cent in 2024.
According to the IMF, Irish inflation is expected to rise by an average of 5.7 per cent in 2022, more than double its January projections. Inflation will fall back to 2.7 percent in 2023 and 2 percent in 2024, the IMF expects.
The projections are well below the government’s forecast of 6.2 percent inflation this year. The economic and social research institute assumes that prices will rise by 6.7 percent this year and reach a high of around 8.5 percent in the summer.
Irish inflation hit 6.7 percent in March, the highest in more than 20 years, with euro-zone inflation hitting a new high of 7.5 percent in the same month.
KBC Ireland chief economist Austin Hughes expects Irish inflation to rise above 7 per cent this month.
Mr Kammer said the war in Ukraine was “a major setback for Europe’s strong but incomplete recovery from the pandemic”.
The fund cut its growth forecasts for advanced economies by a percentage point to 3 percent in 2022 from January forecasts and said emerging markets are likely to grow 2.7 percent, more than a point below previous estimates.
France, Germany, Italy and the United Kingdom “will hardly expand or even contract for two consecutive quarters this year,” Kammer said, while Russia’s economy will contract by 8.5 percent and economic activity in Ukraine will slump by 35 percent.
https://www.independent.ie/business/irish/housing-supply-is-biggest-hurdle-to-hosting-ukrainian-refugees-imf-41578943.html The housing supply is the biggest hurdle for accepting Ukrainian refugees – IMF