Central bank lowers economic forecast

RichardAnd

It seems the central have lowered their expectations for the coming year (again).

http://www.rte.ie/news/2011/0131/economy1.html

They predict very modest growth in GDP and a very small contraction in GNP. Further, they claim unemployment will rise back to 13.7% once again this year and remain fairly constant for 2012 also.

What struck me as interesting about that article was that reduced disposable income is being cited as a reason for the lack of economic improvement. This is interesting in that they go on to say that wages must come down also. Whilst I don't entirley disagree with this, warning of a lack of household income alongside calling for wage cuts is something of a paradox.

As to my own take on this, I can't say I'm surprised as it merely seems to confirm my own opinions that 2011 will be a year where things, whilst not getting much worse, will not bring improvement. The unemployment prediction seems reasonable. I would predict, however, the most of the newly unemployed in the coming year will be graduates and students as opposed to those who have lost their jobs.

All in all, I don't expect 2011 to be very exciting.

ei.sdraob

RichardAnd wrote: »

All in all, I don't expect 2011 to be very exciting.

If that 50+ billion the central bank used in ELA explodes in their faces then it will be a very interesting year :P

Tea drinker

RichardAnd wrote: »

What struck me as interesting about that article was that reduced disposable income is being cited as a reason for the lack of economic improvement. This is interesting in that they go on to say that wages must come down also. Whilst I don't entirley disagree with this, warning of a lack of household income alongside calling for wage cuts is something of a paradox.

So basically no way out unless we reduce the debt burden through changes in the guaruntee to burn bondholders. And a slow recovery after this... maybe

Sticky_Fingers

RichardAnd wrote: »

It seems the central have lowered their expectations for the coming year (again).

http://www.rte.ie/news/2011/0131/economy1.html

They predict very modest growth in GDP and a very small contraction in GNP. Further, they claim unemployment will rise back to 13.7% once again this year and remain fairly constant for 2012 also.

What struck me as interesting about that article was that reduced disposable income is being cited as a reason for the lack of economic improvement. This is interesting in that they go on to say that wages must come down also. Whilst I don't entirley disagree with this, warning of a lack of household income alongside calling for wage cuts is something of a paradox.

As to my own take on this, I can't say I'm surprised as it merely seems to confirm my own opinions that 2011 will be a year where things, whilst not getting much worse, will not bring improvement. The unemployment prediction seems reasonable. I would predict, however, the most of the newly unemployed in the coming year will be graduates and students as opposed to those who have lost their jobs.

All in all, I don't expect 2011 to be very exciting.

Wages need come down to make us more competitive but some of the lack of disposable income is due to the government raping the taxpayer to pay for their mistakes. The probable increase in bank interest rates plus the expected increase in food and fuel prices is going to put the hurt on a lot of people and in many cases finally break them. It's going to be a bad year for many on this island and I doubt things will get any better in 2012.

RichardAnd

Tea drinker wrote: »

So basically no way out unless we reduce the debt burden through changes in the guaruntee to burn bondholders. And a slow recovery after this... maybe

It will be a slow recovery no matter what we do and even then, the question arises; recovery to what? The only thing that had employment here so high was a house building bubble that will not happen again. Ireland will recover to how it was back in the olden days, the unremarkable little island on the edge of europe.

Tea drinker

Well what reform has there been in public service?
We need more efficiency and some kind of WMD against Quango's

RichardAnd

Tea drinker wrote: »

Well what reform has there been in public service?
We need more efficiency and some kind of WMD against Quango's

Considering that there is a possibility of Labour getting into power in the next election, we shall see neither. In fact, going by what gilmore has been spewing lately, him getting into power will result in MORE quangos, not less as he's announced plans of "job creation boards" and "NetCo" (broadband releated).

My dad made a joke last night about the possibility of labour and SF in a joint coalition government. If it comes to pass, I'm emigrating and that is coming from someone in full employment in a very good job.

hinault

Under the EU/IMF deal to borrow €85 billion (or €68 billion + €17 billion surety from National Pension Fund), our repayments are predicated upon this country achieving given levels of annual growth in order to repay both the capital and the interest charged within a given timeframe.

Practically every estimate of growth given has been reduced subsequently.

Permabear

This post has been deleted.

hmmm

Permabear wrote: »

This post had been deleted.

Not to forget the increasing stealth charges e.g. increases in health insurance costs, charges for bin collections, road tolls etc. We are paying more in tax and getting less in return, but it allows us to pay people like Callely 17k for 2 weeks "work".

ardmacha

road tolls etc

Odd then that the NRA are having a court case to have tolls reduced. But nothing beats a rant.

Head The Wall

That's news to me as well. Maybe they should also be concerned with the 21% increase in charges to commercial customers when they bought out the M50

femur61

Doesn't really take a rocket scientist to work out if consumers are spending then no growth. Theres very little disposable income out there. People seems seem to be shell schocked at the USC and reality has set in.

ei.sdraob

the growth forecasts in this and the suggestion of a "credit-less" recovery

blow a big hole in the governments national recovery plan

oh well

gonedrinking

femur61 wrote: »

Doesn't really take a rocket scientist to work out if consumers are spending then no growth. Theres very little disposable income out there. People seems seem to be shell schocked at the USC and reality has set in.

All the political parties don't seem to realise that you can't tax your way out of a recession, lower taxes are what is needed or at least a freeze on any more tax increases for the next 5 years to bring confidence back to consumers. There also needs to be a freeze on any public sector pay rises for at least 4 years- what are public sector workers going to do- quit? Theres no jobs out there so they will just have to put up or shut up.

ardmacha

There also needs to be a freeze on any public sector pay rises for at least 4 years- [/QUOTE

There is, thats called the Croke Park agreement.

what are public sector workers going to do- quit? Theres no jobs out there so they will just have to put up or shut up.

There certainly are jobs out there in some sectors. For instance, there is no advantage in the IT people in the public service, whose work is needed to automate procedures to save cost, clearing off to the private sector.

gonedrinking

they'd be few and far between, plus they wouldn't like the idea of having to do a bit of work during their day if they moved to the private sector