The International Monetary Fund (IMF) says public opposition to water charges is beginning to weaken.

It says the reduction in charges has softened the public protests against the new regime.

It comes after one of the comments made in a new report on the progress of Ireland since it left the bailout in 2013.

The report is broadly positive of the Irish performance.

It supports the new restrictions on mortgage lending, but it says more needs to be done to help those who are still in mortgage arrears.

The IMF also says the government could need new austerity measures worth over €500m if Irish Water fails the market corporation test.

Craig Beaumont from the IMF says there will be no easy fixes if the new utility fails the test.