THE IMF has held up its hands and admitted it got it wrong when calculating the effects of austerity in Ireland.
The organisation said that it completely underestimated how the Irish economy would perform under strict spending rules.
The International Monetary Fund (IMF) said in an academic report that it believed for every €100 of austerity through higher taxes and spending cuts -- this would impact €50 in terms of growth and unemployment.
However, the real effect meant that the austerity cut €90 to €150 out of the system.
The admission is likely to make Finance Minister Michael Noonan's job far more difficult ahead of yet another austerity budget in December.
The IMF said there was an overall drop in incomes due mainly to increases in taxes and austerity measures in Ireland.
This ultimately served to push up poverty levels and squeeze the middle class.
We got it wrong on austerity and made things worse - IMF - News, Frontpage - Herald.ie