THE CENTRAL BANK has predicted that unemployment in Ireland will not fall below 14 per cent before the end of next year.
In a quarterly bulletin, released today, the Central Bank predicted that gross domestic product (GDP) growth this year would be 0.9 per cent. They had previously forecast a GDP growth rate of 1 per cent for 2011.
Reuters notes that this figure is slightly at odds with the 0.5 per cent growth forecast by the International Monetary Fund earlier this week.
Significantly for those aiming to buy property (or worried about increasing negative equity) the Central Bank predicts that residential and commercial property prices will bottom out in 2011.
The Central Bank’s report says that sluggish consumer spending, which it predicts will reduce by another 2.2 per cent this year, will contribute towards the slight slowing of expected growth. The report reads:
Although output growth is set to re-emerge, employment and disposable incomes will remain under downward pressure in the short-term.
Investment spending will also fall by an expected 11.5 per cent this year.
However, the Central Bank is more cheerful about certain factors next year – it feels that consumer spending will stabilise and in fact grow by 2.2 per cent in 2012. It also predicts that investment spending will return to growth of around 2 per cent in 2012.
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