Sign in. It’s quick, free and it’s up to you.
An account is an optional way to support the work we do. Find out more.
THE EUROPEAN COMMISSION has affirmed its expectation that the Irish economy will grow at a slightly slower pace than the forecasts issued by the Government.
A report published this morning shows that Brussels expects the Irish economy to grow by 1.1 per cent this year.
That compares to an expectation of 1.3 per cent in the Irish Government’s Stability Programme Update issued only last week, and a projection of 1.5 per cent issued at the time that Budget 2013 was published.
The lower-than-expected growth in GDP – the value of all goods and services produced in Ireland – means the government will find it more difficult to meet the deficit-to-GDP targets laid down in the bailout plans.
The Commission said it expected Ireland’s budget deficit for 2013 to be the equivalent of around 7.5 per cent of its GDP – virtually unchanged from the 7.6 per cent of last year.
The biggest dent in the deficit will be made in 2014, when GDP is expected to rise by 2.2 per cent, meaning the deficit will fall to 4.3 per cent of GDP.
Ireland will need to reduce the deficit to within 3 per cent of GDP by 2015 in order to meet the targets set by the European Commission.
Ireland’s own forecasts, however, had suggested economic growth of 2.4 per cent for next year – suggesting that Ireland may not have as much breathing space as expected in its efforts to meet those targets.
The forecasts also paint a gloomy picture for Ireland’s efforts to lower its unemployment rate – Brussels’ forecast is that unemployment will average at 14.2 per cent this year. The rate currently stands at 14.0 per cent – indicating an expectation that the numbers out of work will increase gradually this year.
Next year’s forecast is that unemployment will fall to 13.7 per cent – a number which would still mean hundreds of thousands of people out of work.
To embed this post, copy the code below on your site
Brussels must be full of geniuses, currently preparing for pay cuts. Car to go and UPC to go no holiday in Ireland and re budgeting weekly shopping. They cut I cut and head scratching over lack of growth. Politicians aren’t very smart.
who was hitlers propaganda minister name.
Josef Goebbels?
Thank you Gavin and it looks like his talents in propaganda have not gone unnoticed in EU circles .
There’s no growth because essentially we don’t have a domestic economy. We don’t have a domestic economy driving recovery because people are existing rather than living..raft of new taxes, no confidence in the traditionally big drivers of the home economy such as retail, construction and transport. Household costs heading one way.. Health insurance, heating costs, electricity costs, education costs and on top of all that an avaricious banking sector that’s taking care of its own business rather than contributing to a recovery by holding ECB interest cuts for their own pocket. Should we be surprised at Europe’s gloomy forecast?
Spot on. Economics 101 for ECB heads needed. And all I hear on radio today is u better pay the big bad revenue your property tax. Radio stations doing great PR for austerity measures.
We really, really need somebody to grab this situation by the balls and tell us the truth. We are spinning our wheels.
It’s the fricking austerity that’s stopping growth and politicians don’t understand that, we’ll the ones in power don’t.
Can somebody clarify what was said recently about an error in the excel formula that is the basis for the results of austerity? Or was it just some story made up by anti austerity sides?
University of Massachusetts economics student uncovered the flaw. Verified by two of his professors. Upshot is, austerity is “nonsense” and government borrowing is not destructive to economies. I don’t have the links but you’ll find all the info if you search it. It’s an uncomfortable read for the pseudo-religious pro-austerity zealots. A Galileo scenario for the flat-earth-hugging Vatican style economics types.
We did a piece on it last month: http://jrnl.ie/873774
Basically, there’s a regularly-cited study in the US which examined the relationship between a high national debt and poor economic growth. It found that growth started to slow way down in countries where debt was equivalent to 90% of total economic output.
Only problem was, there was an error in an Excel formula so the ‘average’ (of growth in countries where debt > 90%) was a lot lower than it ought to have been.
Thank you, Joseph.
Guys, if this is the case why hasn’t somebody screamed the house down about this crap? This is kind of a big deal!
Gav, you have your finger on the pulse. What’s the craic here?
Sorry, as I was writing that you replied.
Unagi
#ninja
There’s a Surprise… Government over estimating Our so called Recovery. Not :0
Agreed … i am in total shock that the Governments efforts and geuinely extensive program of austerity is not delivering the Growth that these obviously intelligent (i make the assumption they are intelligent, because they pay themselves so much) FF/FG/Labour TDs expected?
Now, i wonder if they will redouble their austerity plans, because surely at some point, the austerity efforts will deliver GNP growth …… Or… is it possible that austerity is actually killing the economy and the people??
Hey! I just saw a flock of pink pigs flying past my windows!!!!!!
So Cathal.. You think we just continue to borrow a billion a month to keep things going!!! The word austerity is used so much in Ireland but I feel it has a different meaning to what it was 20 years ago..
Truth is that Ireland has a far bigger obesity and alchohol addiction problem than it does with starvation or people living on the streets… Things are hard yes but its all relative…
Declan good man nothing like a bit of diversion to try and knock the flow of a thread.
In case you forgot the article is about the EU’s revised growth figures for Ireland versus the governments.
It doesn’t take a genius to see that if you keep taking money out of the productive real economy via tax hikes or mortgage increases, and moving it to unproductive areas (like paying bondholders who don’t spend the money in Ireland, or paying banks who don’t lend) then the economy slows to a halt.
The truth is its a stupid idea to think you can tax and cut your way out of recession. And these are the brains of the EU operation.
If we don’t spend we can’t grow its that easy . Cut us some slack and you will see growth
Do people really think we can continue to spend money we don’t have?
If we spend more than we take in, we have to borrow from bondholders or from the Troika.
Therefore, the only thing to do is not spend more than we take in.
Some call this austerity, others call it common sense.
I agree. It’s unpopular, but we could reduce the numbers of the public service by 30%, increases the wages of those remaining by 10%, and give a large tax cut to everyone else.
This is one way to growth.
Oh and didn’t you forgot the 30% cuts in social welfare, Floodzie – just to complete your pretty scenario?
Ireland has absorbed enough austerity for a generation.
Penfan – please explain where we get the money, on a sustainable basis.
Penfan – I’ve offered a path to recovery, what’s yours?
The middle classes are the engine of this economy, and as you quite rightly point out, have suffered enough austerity.
Whose taxes will you raise to pay for our spending?
And when the EU does a u-turn on austerity you will see FG/Lab cronies claiming this is what they were asking for all along. #Waitandsee.
Although we’re still deep in the crapper
Growth, however small, is something Im happy about.
I’ll moan & groan in the many, many, many negative articles about the state of our nation but I’ll savor this as positive.
Save me the reply putting this growth into context please.
@ Adam, I am impressed that you can successfully do that without the aid of drugs. Well done. Some of us lesser beings are unable to escape reality.
With the likes of our TD/government ministers and Euro muppets they don’t feel the pinch like the normal joe soaps, After all they have expenses for phones/car millage etc,Some of them like inda could be classed as institutionalised having got the state to pay for everything over the last 40 odd years.
“The only function of economic forecasting is to make astrology look respectable” (J K Galbraith).
These guys are making it all up as they go along. As someone else said, we don’t expect biologists to be able to predict the next stage in evolution; why should we expect economists to be able to predict the future? Yet, they make predictions every day…!
My father used to say that the average housewife understands more about economics than the average politician, and in the last few decades, I’ve found nothing to prove him wrong. When I consider that a failed journalist (whose most impressive stint of prior work experience involved folding towels in Selfridges) can become Chancellor of the Exchequer in the UK, I regret that Dustin the Turkey didn’t succeed in his presidential campaign!
In order to counteract the effects of the crisis, maybe it’s time politicians and administrators took advice from professional economic crisis specialists with a proven track record of positive results. For example, the Orlando Bisegna Index, specialists in the economic crisis, have developed a program that has helped various counties with debt problems, business failures and unemployment, thus improving the economic condition of many families. The program has arisen from their development of the Orlando Bisegna Index, a unique index based on 206 diverse indicators that measures the intensity of the economic crisis in the G20 countries and other Euro countries.
Given that none of the policies adopted so far seem to be working, and now that the “expansionary austerity” approach has been totally discredited, surely a change of tack is warranted.
More like Brussels sprouts
How can we have growth if we are extremely hit by this ongoing austerity madness ?
somebody should told gilmore this before his bullshit in the papers informing us all that austerity works its good for jobs and economic growth..
Well knock me over with a feather! We won’t even achieve 1.1.
have your say