The Irish economy improving EU and ESRI forecast

Sceala Philosopher Location: Recife Brazil

Is this economics news for real?
Has Ireland turned the corner, or and more likely, is this the EU trying to convince the markets that Ireland along with the UK and Italy are not in a very bad economic shape. Greece and Portugal we all know are de facto bankrupt. No chance that either of their exports can close the gap.
is this think tank trying to convince the Irish people to pay the debts for those Casino bankers.
All is looking good in Ireland, so keep paying your debts to the corrupt EU banks.

The optimistic forecast is the positive news, the cuts they say are necessary the very bad news.
The ESRI, The Economic and Social Research Institute says the Government should aim for a more rapid reduction of the budget deficit, eliminating it entirely by 2014, through more spending cuts and increased taxes.

It also says a European solution is needed to relieve Ireland of much of the costs of the banking crisis.

The ESRI says national income will grow by 0.5% this year, led by exports, with particularly strong export growth now showing in Irish owned companies.

In a more upbeat view of the economy, the ESRI says Irish-owned firms in the traditional sectors like food and drink are now seeing very strong export growth, as the pickup extends beyond the multinational sector. Service exports are also forecast to enjoy another year of strong growth.

But it says the budget deficit should be cut more rapidly, and the ESRI urges the Government to go for a zero deficit by 2014, rather than the 4.7% deficit the Government is planning. This would give it more credibility in the markets, where the Government must return by then to fund a very large rollover of debt due that year.

It says Ireland should get a cut in the bail-out interest rate from the EU without any conditions such as a rise in corporation tax, because ireland has already contributed to Europe by confining the banking crisis to within the state and limiting damage to other country's banks.
The Irish economy improving EU and ESRI forecast
The ESRI also argues in favour of a European solution to relieve Ireland of much of the burden of recapitalising the banks, thereby reducing the overall debt burden.

Meanwhile, the Irish Congress of Trade Unions (ICTU) has rejected the ESRI's calls for deeper spending cuts, saying they would push Ireland much deeper into recession and would have 'terrible social consequences.'

ICTU general secretary David Begg also queried the body's track record, claiming that the latest call is a complete reversal of the ESRI's position in the Autumn.

'Just a few months ago, the ESRI was warning that planned Government spending cuts were too big and could tip the country into prolonged recession,' said Mr Begg.

'That was in October 2010, when Government planned to cut just €4 billion - but it went on to cut over €6 billion in the budget. And we are living with the negative consequences of this austerity, with suppressed demand and bigger job losses.

'Previously, the ESRI warned that we were going too far and too fast in terms of cuts. They said we should slow the cuts and extend the period of deficit reduction to 2016 - a proposal first made by Congress. Now they've reversed that and say we need to go much further and much faster. Which is it? To my mind, this raises questions about the credibility of the ESRI,' said Mr Begg.

He went on to say that the ESRI's latest recommendations would tip the economy into deep recession and could have terrible social consequences for very many people who are already struggling with debt and reduced incomes.
The Irish economy improving EU and ESRI forecast
'The Institute cannot divorce itself from the consequences of what it recommends and the potential damage to peoples' lives. And ultimately, that is what this is all about - the quality of peoples' lives. It is not just an accounting exercise,' Mr Begg said.

Irish economy set for stronger growth this year: says think tank
Ireland (Berlin: IIK.BE - news) 's troubled economy is set to grow by a stronger-than-expected 2.0 percent this year, the nation's leading think-tank predicted on Wednesday.
Gross domestic product (GDP) will rebound sharply, the Economic and Social Research Institute (ESRI) forecast in its latest report, upgrading the previous 2011 estimate of 1.5 percent. The economy shrank by 1.0 percent last year.
Further ahead, the Irish economy is set to pick up steam and grow by three percent in 2012, according to the ESRI. That was upwardly revised from prior guidance of 2.25 percent.

Ireland, once known as the Celtic Tiger, was severely battered by the global financial crisis, a domestic property market meltdown and a fierce recession.

Late last year, it was forced to seek an 85 billion euro rescue package from the European Union and the International Monetary Fund as massive debt and deficit problems left the country on the verge of collapse.

"We see the economy as being in a process of transition from one where domestic demand was the driver of growth to one where exports will play an important part in economic recovery," the ESRI added on Wednesday.

"Firms in several traditional sectors are seeking markets abroad to compensate for depressed domestic demand. Meanwhile exports of multinationals continue to grow as competitiveness is regained."

The ESRI expects domestic demand to remain very weak this year, with investment and government expenditure declining and household expenditure static.

It attributes the weak demand "primarily to the negative effect of contractionary fiscal policy."

The think-tank added that Ireland's public finances are also in a process of transition to a new lower level of expenditure and revenue.

"The official budget targets, modified by the extra cost of bank restructuring this year, are achievable. If the profile set out by government is maintained, then public debt will be sustainable," it said.

With the need to return to financial markets in the near future, the Institute added that attempts should be made to eliminate the budget deficit faster than is currently envisaged.

Meanwhile on Tuesday, EU Economic Affairs Commissioner Olli Rehn said to "expect" a drop in the interest rate charged under Ireland's international bailout, after months of fighting by Dublin for fairer terms like Greece.

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