IRELAND’S ECONOMY WILL grow by 0.9 per cent this year but the unemployment rate will stabilise at around 14 per cent, economists at the ESRI have predicted.
The Economic and Social Research Institute has also said the austerity measures over the past four years are having a positive impact which can be seen in the improvement in the public finances. The report noted that there are very few alternative open to the government to stimulate growth.
In its Quarterly Economic Commentary published today, the ESRI said that it expects the eurozone will continue to “muddle through” the ongoing turmoil in the region. The report says that the reaction of the private sector to the crisis will be a key factor in Ireland’s economic recovery.
The Institute forecast that Ireland’s export growth will slow down in 2012 compared with previous years.
The Irish economy returned to modest growth in 2011 with an increase in real GDP of about 0.9 per cent, the report estimates. It predicts that this economy growth will continue but remain muted.
The ESRI also warned that while austerity measures are helping to correct the public finances, they are causing a slowdown in economic activity.
Consumer expenditure is forecast to remain relatively stable in 2012.
The report also includes the first forecast from the think-tank for economy activity in 2013, which it believes will see an increase in GDP of 2.3 per cent and an unemployment rate of 13.7 per cent.
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