The Economist's view of the Irish economy

The Economist Intelligence Unit gives their forecast for the Irish economy 2008-2009. It does not make for pretty reading.

* We expect the multi-party coalition, formed in June 2007, to remain in office over the outlook period. There is a limited risk of the arrangement collapsing, with the Green Party the most likely participant to withdraw.
* Apart from environment-related policies, we do not expect the new administration to hasten the pace of reform, largely because of differences on policy and the power of vested interests to block change.
* 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.

The Government can call the EIU doomsayers if they like, but the facts speak for themselves.

4 thoughts on “The Economist's view of the Irish economy”

  1. My headline is probably misleading, it’s and update from the Economist Intelligence Unit, so would not have appeared in the weekly newspaper.

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