Economy

IMF approves next $1 billion for Ireland bailout program

International Monetary Fund Managing Director Christine Lagarde
Getty Images

The International Monetary Fund disbursed the next $1 billion aid tranche to Ireland on Wednesday, as the European island nation remains on track with the conditions of its loan program.

The IMF is one of a trio of lenders overseeing Dublin's 85 billion euro ($115 billion) bailout, necessary after its biggest banks collapsed in 2010. The IMF's portion of the program is about $30 billion.

(Read more: IMF: Emerging markets can rely on us)

Ireland is set to become the first euro zone country to exit an EU/IMF bailout in December after returning to debt markets, but its economy still needs to start growing by more than 2 percent per annum from next year on to help make its national debt sustainable.

The IMF said Ireland's economy contracted 1.2 percent year-on-year in the second quarter as exports fell and domestic demand shrunk. But more recent indicators suggest growth should pick up in the second half of the year.