I should remind readers that the Economist Intelligence Unit in November 2007 said the following:
* Despite an estimated increase in the euro area inflation rate to 2.6% in October, the European Central Bank (ECB) is not expected to increase interest rates above the current rate of 4%.
* The fiscal position is deteriorating, and this will place constraints on government expenditure. A deficit is expected by 2009.
* GDP growth is expected to slow sharply in 2008, mainly because of the ongoing slowdown in the previously overheated property sector. However, there is a real risk of recession.
* Unemployment is expected to rise over the outlook period, as the construction sector shrinks, but inflation and the current-account deficit will both fall.
I blogged about it back then as Ahern had recently said people who talk down the economy might as well kill themselves. Well, I guess those naysayers were correct. And Ahern was simply ignoring the problem. His successor has also ignored the problem. Now we have to deal with what the EIU forecast.
Anyone who has been watching sites like Treesdontgrowtothesky, DaftWatch or Irish Property Watch will see that the property market is in very serious doo-doo. And it is getting progressively worse. The number of houses coming on the market is rising, and the number of buyers out there is falling as a result of a return to normal lending conditions (yes we were living in a credit bubble for some time).
So what does all this mean for Ireland?
It’s the big R. And it will be with us for a while.
Update: The ESRI press release is available here.
[...] recession. Tomorrow we are going to be hearing a lot about it thanks to the ESRI quarterly report and [...]
And it’s already been here a while. It’s just that everybody has been in denial.
Too true. Just as people are still in denial about the value of their properties. Once reality sinks in there will be blood on the streets.
i am hoping that the global economy would recover from this economic recession. life has been very hard with these massive job cuts.
i can see some improvement in US economy. i just hope that we will be out of this economic recession soon.
during the height of the economic recession, our online and offline business in the US have suffered some major drop in sales. now our sales are getting slowly back to normal.