The International Monetary Fund has praised the Government's moves to support the banks and tackle the budget deficit, saying they had helped stabilise the economy.
But the IMF also urged the Government to stick to its targets for cutting the deficit in the coming years.
Read the IMF's notice
It also called on the Government to be more specific about the measures it would take.
The IMF's board was issuing its comments after considering a report from its staff on the Irish economy.
The IMF delegation spent two weeks in Ireland in mid-May, during which it met the Minister for Finance and public and private sector bodies.
Its report, issued late last month, predicted that the economy will shrink by 0.6% this year, but grow by 2.3% next year.
Today, the IMF board said the speed of recovery was likely to be moderate, with 'relatively limited' growth and high unemployment.
It called for early action to introduce a special bank resolution mechanism, or rules to deal with any future bank failures.
The IMF board also called for the setting up of a 'fiscal council' to advise the Government on risks to the public finances.
