Staff from the European Commission, in liaison with staff from the European Central Bank, visited Dublin from 14 to 18 May to conduct the ninth post-programme surveillance (PPS) review for Ireland. Staff from the European Stability Mechanism also participated in the meetings on aspects related to its Early Warning System. Underlying domestic demand continues to be supported by favourable labour market developments and strong construction investment. Unemployment is falling rapidly towards pre-crisis levels. External risks to the outlook relate primarily to the ongoing negotiations on the terms of the UK’s withdrawal from the European Union as well as changes to the international taxation and trade environment. The general government deficit is expected to decline further in the near term underpinned by robust output growth. However, high external uncertainty puts an even greater premium on prudent fiscal policy, and while Irish public indebtedness has diminished, it remains elevated. The favourable cyclical situation combined with buoyant corporate tax receipts provides a window of opportunity to accelerate deficit and debt reduction and further reduce legacy non-performing loans (NPLs).