Ireland faces a deeper recession than any advanced economy, while the collapse of the property market and related financial stress in the banking sector will continue to be a drag on growth until at least 2014, the International Monetary Fund says in its annual report on Ireland.

The Fund says “only a modestly-paced recovery is foreseen” in its report, released late on Wednesday. Gross Domestic Product is projected to contract by 13.5 per cent in the three years to 2010, by which time unemployment will have reached 15.5 per cent.