The International Monetary Fund (IMF) said Ireland should stick to the terms of the bailout agreement and cut €3.1 billion from the Budget in October. The IMF said it was not its jobs to dictate the terms of the budget but said Ireland needed to continue its track record of fiscal consolidation.

That meant going ahead with the planned tax increases and spending cut.

The IMF was speaking at the international lenders to Ireland gave the green-light on their latest review of the bailout agreement. It also urged the government to accept assistance from the organisation when the bailout ends later this year.

The body says that it still expects moderate positive growth this year, and that the Budget is still on-track in fiscal terms.

They have also welcomed the broad acceptance of the Haddington Road agreement because, they say, it will deliver public sector savings.

They add that it will be important to "maintain careful and proactive budget management to contain spending within allocations for the remainder of the year and to ensure the annual fiscal targets are again met".

The IMF says that while govenrment policies are moving in the right direction but that reducing unemployment remains a key challenge.

In a statement the group says the "Pathways to Work" initiative moves in the right direction, but significantly more resources are needed to ensure meaningful engagement with job-seekers, especially the long-term unemployed".

The IMF's Craig Beaumont says talks are still on-going about whether the full €3.1 billion will be needed.