Turned a corner?

Dyslexic I am

The country currently spends 50 bn and receives 32 bn.

Total deficit: 18 bn.

Even if, by magic, the government's coffers swelled by 20% to 38.4 bn, and if spending is reduced by 20% to 40 bn, that still leaves a shortfall of 1.6 billion nicker.

There really is no way out of the economic crevasse I'm afraid.

Victor

The €50 billion includes sorting out the banks, for which we should get some (not enough!) money back.

Dyslexic I am

Victor wrote: »

The €50 billion includes sorting out the banks, for which we should get some (not enough!) money back.

If you take away 'sorting out the banks', how much is the total structural deficit?

And are you taking future increases of debt repayment into account?

easychair

The Irish economy has the highest level of debt to GNP in the developed World( even worse than what is popularly thought to be the most indebted economy in the world, Japan), and the second highest debt to GDP.

What that means in laymans terms is that Ireland is the most bankrupt economy in the world, even more so than Japan.

Japan has tools at its disposal that ireland simply does not have to help cope with that - Japan has the prospect of devaluation, is able to control its own interest rates, and Ireland also has considerably larger levels of private and corporate debt, which is the sort of debt that has a larger adverse impact on an economy than government debt.

There are constantly stories talked about that Ireland will have an export led recovery, and it should be noted that Japan exports a far higher percentage of its manufactured goods than does Ireland, and no one could seriously argue that Japan has reduced its debt burden or brought it under control after many years of exports led growth.

Victor

Thats only under one measure of debt. Many countries are in a much worse position than Ireland regarding pensions.

easychair

Victor wrote: »

Thats only under one measure of debt. Many countries are in a much worse position than Ireland regarding pensions.

When you are bankrupt, the level of debt is very important, and he cost of (a) servcing the debt and (b) paying off the capital depend on teh level of debt.

How will "pensions" affect Irelands ability to get out of its debt crises, in a way which Japan has not been able to use "pensions" for the last number of years to help Japan? Can you explain?

wildefalcon

As most people seem to judge the economy by house prices I'll get this said first:

House prices

They have quite a bit further to go, sorry, my guess is another 10 to 25 % from peak.

Sorry.

Balance of trade

Ireland is really winning, and if agri and biochem continue as they are, then Ireland will continue to improve

Public Sector/spending

Still very expensive, and poorly managed, but about par for the rest of the world. A LOT better than Grease. Impact on the economy: Higher taxes and commercial rates DON'T cause an economy to grow.

Native economy (local shops, small industry, the un-glamorous nuts and bolts of the economy)

Still badly messed up - they geared up during the tiger on cheap credit, and are paying a heavy price in interest and reduced revenues. Surviving, but unless things improve a lot will fail, the remainder will be ultra cautions and won't/can't expand if and when a lift happens.

The absence of credit at a local level will hamper new entrants to the local economy.

What can be done:

The native economy needs a boost, small businesses employ the most people. Government can make credit available, but unless a business is competitive it won't survive.

Overheads are the killer. So Government needs to reduce them, lower rates would be a start, relaxed planninng rules for start-ups, lower tax rates and lower employers taxes would also help.

The fall in property values will help here - lower rents help a heck of a lot.

The future

If the Gov't implements serious local government reform, and this translates into lower Rates, then the Economy has a good chance of coming out of recession in 2 or 3 years.

A raft of new taxes, failure to reduce costs (compare UK postage with ROI postage - 3 TIMES the price) and the burden of excessive local taxes will mean that the economy will remain in recession for a considerable period of time, until EU wide inflation makes the currently high wages and prices closer to those of competing economies.

Or perhaps not!

I'm getting some breakfast, now!

easychair

I'm not sure what most people judging the economy by house prices have to add.

the facts are that Ireland is the most bankrupt country in the developed world, and the levels of personal debt and corporate debt (excluding the financial institutions), are also the highest in the developed world.

Thats a hard position to get out of, and Japan is the prime example of undergoing years of depression and it still has no immediate prospect of recoveing from its still massive debts.

Debtocracy

Japan's not so bad in that most of its debts are internal. So the payment of debt by the govenrment is mostly a redistribution of money to different areas of the economy. The problem with Ireland is that so much of the boom was fuelled by external sources of credit, and therefore payback will be a process of draining money from the entire economy.

duke916

The future

...until EU wide inflation makes the currently high wages and prices closer to those of competing economies.

Or perhaps not!

I'm getting some breakfast, now![/QUOTE]


high wages??? wtf. wages have been slashed across the board of the middle and lower classes already. half the people in this country consider it more beneficial to be on the sh1t end of the dole queue than work 40 hours a week for a slaves wage. over the last three years ive had no increase whatsoever, no bonus and a slap in the face reduction of 30% which makes my wallet over 800euro lighter each month! its prices that need to come down on food products, petrol, insurances and other essential day to day living items, not more pay cuts. the balance is all wrong here. in the good times prices were high because wages were also high, now wages are low and prices still rise. if this continues, more businesses will fall because people simply cant (not wont) spend.

wildefalcon

duke916 wrote: »

The future

...until EU wide inflation makes the currently high wages and prices closer to those of competing economies.

Or perhaps not!

I'm getting some breakfast, now!

high wages??? wtf. wages have been slashed across the board of the middle and lower classes already. half the people in this country consider it more beneficial to be on the sh1t end of the dole queue than work 40 hours a week for a slaves wage. over the last three years ive had no increase whatsoever, no bonus and a slap in the face reduction of 30% which makes my wallet over 800euro lighter each month! its prices that need to come down on food products, petrol, insurances and other essential day to day living items, not more pay cuts. the balance is all wrong here. in the good times prices were high because wages were also high, now wages are low and prices still rise. if this continues, more businesses will fall because people simply cant (not wont) spend.

Sure!

Irish wages are high - top 8 in Europe.

http://en.wikipedia.org/wiki/List_of_sovereign_states_in_Europe_by_net_average_wage

Of course you are right, it doesn't feel like a lot. Wages are high, but the cost of stuff is much higher, so Irish people are worse off.

Which is why the Government has to tackle the cost base that business experience.

I'm not saying that these cost savings will be passed on by existing businesses, it doesn't work that way. What happens is that new business will start up and compete.

SO, if the Gov't made Rates lower, lowered insurance costs (Public Indemnity) and made it cheaper and easier to start a business, then prices would come down.

We're so job starved, that we tend to keep every business on life support, long after the plug should be pulled. If there is enough economic activity then the failure of one business means a lot less (in general) as there will be 3 or 4 new businesses to scoop up the lost trade and jobs.



Damn, that was a nice Pizza, good crust.

Minister B

With regard to turning a corner, Ireland's 10 year bond yield has fallen below 8% for the first time since November 9th 2010. Cautious optimism as this could rocket again if Greece was to pursue an orderly default.

http://www.bloomberg.com/quote/GIGB10YR:IND

easychair

The bond rates are really a small part of the problem, which is Ireland has too much debt, and is currently, as said, the most indebted country in the developed world.

The EU's solution? To encourage Ireland to keep adding more and more to the debt, which is an unusual way to try to resolve what is, effectively, a debt crises. Unfortunately the EU wants to do what is best for the EU, and not for any individual country within the EU.

ei.sdraob

Minister B wrote: »

With regard to turning a corner, Ireland's 10 year bond yield has fallen below 8% for the first time since November 9th 2010. Cautious optimism as this could rocket again if Greece was to pursue an orderly default.

http://www.bloomberg.com/quote/GIGB10YR:IND

Jebus whatever happened to perspective
thats the rate that brought IMF into to town about a year ago

Taxi Drivers

ei.sdraob wrote: »

Jebus whatever happened to perspective
thats the rate that brought IMF into to town about a year ago

Yes, but then yields were only going in one direction. They rose from 5% and blew through the 8% mark. Now the momentum is in the opposite direction. They were 14% in mid-July and have no tumbled back through the 8% mark.

8% is still a very high bond yield but if we are to get back to "normal" they had to pass through 8% at some stage - and today just happens to be that day. Getting back to 5% is the really significant one.

ei.sdraob

Taxi Drivers wrote: »

Yes, but then yields were only going in one direction. They rose from 5% and blew through the 8% mark. Now the momentum is in the opposite direction. They were 14% in mid-July and have no tumbled back through the 8% mark.

8% is still a very high bond yield but if we are to get back to "normal" they had to pass through 8% at some stage - and today just happens to be that day. Getting back to 5% is the really significant one.

No the significant point would be to actually going back to markets and selling bonds and then being able to manage the interest payments which are already in the 10 billion a year range on existing debt, never mind new one.

BTW none of the causes that led this country into such a trainwreck have been addressed or solved.

djpbarry

easychair wrote: »

The bond rates are really a small part of the problem, which is Ireland has too much debt, and is currently, as said, the most indebted country in the developed world.

By what measure?

easychair wrote: »

The EU's solution? To encourage Ireland to keep adding more and more to the debt, which is an unusual way to try to resolve what is, effectively, a debt crises.

It's not a debt crisis, it's a liquidity crisis.

ei.sdraob

djpbarry wrote: »

It's not a debt crisis, it's a liquidity crisis.

It is a debt crisis,
even the EU overlords finally admitting it with the likes of Barroso daily using the words now.

djpbarry

ei.sdraob wrote: »

It is a debt crisis...

Debts only become a problem when you don't have the cash to service them. Anyways, it's semantics, I suppose.

ei.sdraob

djpbarry wrote: »

Debts only become a problem when you don't have the cash to service them. Anyways, it's semantics, I suppose.

Points at Greece (and us for that matter)

Dyslexic I am

djpbarry wrote: »

By what measure?
It's not a debt crisis, it's a liquidity crisis.

LOL!

It is very much a debt crisis!

Ireland has to borrow(ie, take on debt) to get liquidity just to keep the lights on.

Back to school with you.

easychair

Dyslexic I am wrote: »

LOL!

It is very much a debt crisis!

Ireland has to borrow(ie, take on debt) to get liquidity just to keep the lights on.

Back to school with you.

You are right, and as ei.sdraob says even the EU seems to be waking up to it. I made a post here which might help to explain and show the extent of Ireland's debts http://www.boards.ie/vbulletin/showpost.php?p=74653789&postcount=148

djpbarry

Dyslexic I am wrote: »

Ireland has to borrow(ie, take on debt) to get liquidity...

So how does that make debt the problem? The problem isn’t the borrowing – Ireland has always borrowed. The difference now is that many have lost confidence in Ireland’s ability to repay those borrowings (although this is slowly being restored).

Let me put it like this. Ireland has recently taken on a whole load of new debt in the last couple of years – does all of that need to be repaid before the economy has a chance of recovering? Or does Ireland just need to balance the books?

ei.sdraob

Lack of liquidity is a result of having too much debt, the root cause remains debt. Both Greece and Ireland are unable to raise more debt due to no one on the open market willing to lend at rates that are not suicidal, this is a direct result of both having acquired too much debt, therefore having to turn to EU/IMF who are (somewhat grudgingly due to the size of debt and local politics) are willing (but keep dragging their feet over the years) to lend at lower rates but with strings attached.

One can say that a person died from blood loss, but the root cause of death would be the same person drink driving and hitting a wall.

Like I said earlier look at the language being used by euro politicians, at first (few years) they went thru denial but now they are moving to acceptance with Greek default being discussed in the open and the words being used finally reflecting the root causes.

cheerio

StudentDad

ei.sdraob wrote: »

Lack of liquidity is a result of having too much debt, the root cause remains debt. Both Greece and Ireland are unable to raise more debt due to no one on the open market willing to lend at rates that are not suicidal, this is a direct result of both having acquired too much debt, therefore having to turn to EU/IMF who are (somewhat grudgingly due to the size of debt and local politics) are willing (but keep dragging their feet over the years) to lend at lower rates but with strings attached.

One can say that a person died from blood loss, but the root cause of death would be the same person drink driving and hitting a wall.

Like I said earlier look at the language being used by euro politicians, at first (few years) they went thru denial but now they are moving to acceptance with Greek default being discussed in the open and the words being used finally reflecting the root causes.

cheerio

This 'economy' has turned so many 'corners' it's beginning to look like a hedge maze.

SD

ei.sdraob

StudentDad wrote: »

This 'economy' has turned so many 'corners' it's beginning to look like a hedge maze.

SD

Krugman commented on this yesterday



Graph speaks for itself

ardmacha

Graph speaks for itself

It speaks, but not very clearly. Obviously learned professors post things on their blogs that are about as clear as some of the stuff here.

What is the Y axis?. GNP per capita?? In what currency? Adjusted for PPP?
I'd say it is in dollars which explains the bulge at the end of 2010, which doesn't reflect anything real in the economy.

It shows a decline, not sure what it says about corners.

OMD

ardmacha wrote: »

It speaks, but not very clearly. Obviously learned professors post things on their blogs that are about as clear as some of the stuff here.

What is the Y axis?. GNP per capita?? In what currency? Adjusted for PPP?
I'd say it is in dollars which explains the bulge at the end of 2010, which doesn't reflect anything real in the economy.

It shows a decline, not sure what it says about corners.

It's all about lies and statistics

thebman

ardmacha wrote: »

What is the Y axis?. GNP per capita?? In what currency? Adjusted for PPP?
I'd say it is in dollars which explains the bulge at the end of 2010, which doesn't reflect anything real in the economy.

Really p***es me off about economists that so many do this.

If your drawing a graph, you appropriately label your axes so that it is clear what they represent unless you don't care if people get your point or not or your unsure of your figures or what they represent...

Yahew

ardmacha wrote: »

It speaks, but not very clearly. Obviously learned professors post things on their blogs that are about as clear as some of the stuff here.

What is the Y axis?. GNP per capita?? In what currency? Adjusted for PPP?
I'd say it is in dollars which explains the bulge at the end of 2010, which doesn't reflect anything real in the economy.

It shows a decline, not sure what it says about corners.

It shows a decline which is lessening, and possibly reversing.

Sand

It also shows theres been temporary rallies previously, which have then been followed by further declines. The good news story is from Q2. Q3 will be remembered for the ECB shoving the struggling European economy under an oncoming train in the name of idealogical purity. How Ireland is doing is that unemployment continues to rise, as does the long term unemployment problem.

And as Krugman noted, some growth is not unusual. Economies tend to grow over the long term. The real key for Ireland is to grow *enough* to sustain all the debts that have been loaded on our shoulders. And to reduce unemployment in line with the plans targets. And to gain control of the fiscal situation - with the unions already threatening war over modest pension reform which will save the princely sum of a few hundred million in 2050...

We're barely into the woods, let alone out of them.

ei.sdraob

Yahew wrote: »

It shows a decline which is lessening, and possibly reversing.

WOOT! We turned a corner!

easychair

Yahew wrote: »

It shows a decline which is lessening, and possibly reversing.

To be fair, it shows a decline. And could "possibly" show anything else, including a graph levelling out, a graph continuing to decline, or a graph reversing.

Yahew

ei.sdraob wrote: »

WOOT! We turned a corner!

Yep.

easychair wrote: »

To be fair, it shows a decline. And could "possibly" show anything else, including a graph levelling out, a graph continuing to decline, or a graph reversing.

It shows a decline levelling out at the moment.

You eternal pessimists are the same as the 2006 property never falls optimists. Its a game of extrapolation. Eventually property falls, and economies recover.

easychair

Yahew wrote: »

It shows a decline levelling out at the moment.

You eternal pessimists are the same as the 2006 property never falls optimists. Its a game of extrapolation. Eventually property falls, and economies recover.

Curiously, a few moments ago you claimed it was reversing. Now you say its levelling off.

A pessimist is what an optimist calls a realist.

djpbarry

easychair wrote: »

Curiously, a few moments ago you claimed it was reversing. Now you say its levelling off.

That graph quite clearly is, at the very least, levelling off. But then, GNP is not the only indicator of economic health. And why is the graph titled “Real” GNP?

Yahew

easychair wrote: »

Curiously, a few moments ago you claimed it was reversing. Now you say its levelling off.

A pessimist is what an optimist calls a realist.

It grew in the last quarter. However thats not enough data points for reversing.So lets say levelling over the last few Qs.

I am a realist. I opposed the property bubble and I oppose the doom and gloom now. You see the pessimism was needed when nobody had it, and not needed when everybody has it. Buffet said something like that.

Ireland has been through it's internal shocks, and adjusted back to a lower GDP where it can grow from. The only fly in the ointment is potential external shocks - Greece etc. Lets see.

Sand

@Yahew

You eternal pessimists are the same as the 2006 property never falls optimists. Its a game of extrapolation. Eventually property falls, and economies recover.

Of course. Eventually, things revert to the long term trend.

Despite all the disastrous policies pusued over the past 3 years....
- Ireland will eventually grow again on a consistent basis
- Ireland will eventually run a budget surplus again.
- Irish unemployment will eventually drop drastically again

None of that is surprising, and the eventual achievement of it will be in spite of the policies pursued rather than because of them ( Look at Iceland, already back in the markets issuing debt whilst we celebrate being just as locked out of the market as we were last month).

That said, just because the economic situation is getting worse less fast, or is levelling out does not mean then that growth will rocket. It may simply sit in Japan territory as budget continue to be cut, interest bills mount, banks refuse to lend, and a heavily indebted population cut back spending to pay down their debts and in fear of further government cuts.

The conditions needed for prosperity (which interestingly do not include confidence...confidence is product of prosperity) in the Irish economy are at best weak. Access to credit is highly reduced. Human capital is at best average ( far too many young people whose only skill is using a shovel or conveying property). Our export to growth model is about the only knife we have in the drawer, but unfortunately our trade partners are too going down the austerity/export to growth model. And in per capita terms, we are no longer the plucky little low cost location which can rely on a certain amount of "catch up" growth. We have caught up.

Describing a particular point of view as doom and gloom, and thus putting it at one end of spectrum of your own construction - with your own view of course in the moderate middle - doesnt necessarily mean what your think it means. Remember the "soft landing" theory came from people trying to compromise between those who said the property market was going to crash horribly (Morgan Kelly) and those who said it would grow forever and ever (Most banks and government economists). Picking a happy mid point of "soft landing" and presuming because it was the mid point it must be true didnt make it so then, or now.

Its worth noting that, statistically at least, Ireland grew throughout the 1980s. What a wonderful decade of economic prosperity that was...

easychair

Yahew wrote: »

It grew in the last quarter. However thats not enough data points for reversing.So lets say levelling over the last few Qs.

I am a realist. I opposed the property bubble and I oppose the doom and gloom now. You see the pessimism was needed when nobody had it, and not needed when everybody has it. Buffet said something like that.

Ireland has been through it's internal shocks, and adjusted back to a lower GDP where it can grow from. The only fly in the ointment is potential external shocks - Greece etc. Lets see.

Your last paragraph is interesting, but is also speculation. To assume that the current GDP will be a floor, and that the GDP will only rise from this point, is an assumption.

Ireland is still living beyond what it can afford, and is still borrowing billions upon billions to make sure the public services are still working. Each additional billion borrowed today means higher repayments tomorrow, and the capital will also have to be paid back.

The debt burden in Ireland, government debt, corporate debt, and household debt, is amongst the highest in the world, and to not understand just what a millstone that is going to be for years into the future, and how that is going to effectively act as a giant handbrake on growth, is to misunderstand how an economy works. Look at Japan (our debts are not worse than those of Japan), and see how debt has effectively rendered Japans economy stagnant now for 20 years.

djpbarry

easychair wrote: »

The debt burden in Ireland, government debt, corporate debt, and household debt, is amongst the highest in the world, and to not understand just what a millstone that is going to be for years into the future, and how that is going to effectively act as a giant handbrake on growth, is to misunderstand how an economy works. Look at Japan (our debts are not worse than those of Japan), and see how debt has effectively rendered Japans economy stagnant now for 20 years.

The fact that you repeatedly compare Ireland to Japan, while omitting the obvious economic differences between the two (Japan has an unemployment rate of just 4.7%, for example), demonstrates a lack of understanding on your own part - you're not really in a position to patronise others.

ei.sdraob

Right lets be realistic here, a very simple question

Have any of the issues that led us here have been solved? (and by solved i am not talking about kicking it down the road for someone else to solve like the NAMA brainfart)

more precisely:
* We still do not have a european deposit guarantee scheme that is complete, works and in any shape resembles FDIC, might be 2020 before we get it
* There is still no bank wind down procedure, Denmark are only ones to make any progress on this
* No one lost their job or was held accountable at the Regulator, what is there to stop them not doing their job again?
* What is in place to prevent another housing bubble developing? If anything the likes of NAMA and govt have an interest in re inflating it
* Where are the real reforms in welfare and PS? so far everything is pretty cosmetic with most of the "savings" being due to pushing people to retire and not hiring (which hurts the service) saving on wages but growing pensions more
* Where is the bankruptcy laws that where promised and supposed to be implemented under IMF/EU?
* Where is the house price database, and no that joke of an index from CSO, Revenue are sitting on all the sales data going back for a very long time, where is the transparency that was promised?
* What is to prevent politicians from engaging in policies of bribing the electorate with goodies in exchange for votes, FF havent gone away you know and still floating about like bad smell, bidding for their time.


So once again, 3 years on, what has been learned and what has been done?

As the world is about to enter a second recession do we really hope to ride it all out on exports alone? What happens to the economy if Obama finally closes the loophole for US companies and offers an amnesty as is reported in the Business & Finance magazine? what then we grow some spuds??

easychair

ei.sdraob wrote: »

Right lets be realistic here, a very simple question

Have any of the issues that led us here have been solved? (and by solved i am not talking about kicking it down the road for someone else to solve like the NAMA brainfart)

more precisely:
* We still do not have a european deposit guarantee scheme that is complete, works and in any shape resembles FDIC, might be 2020 before we get it
* There is still no bank wind down procedure, Denmark are only ones to make any progress on this
* No one lost their job or was held accountable at the Regulator, what is there to stop them not doing their job again?
* What is in place to prevent another housing bubble developing? If anything the likes of NAMA and govt have an interest in re inflating it
* Where are the real reforms in welfare and PS? so far everything is pretty cosmetic with most of the "savings" being due to pushing people to retire and not hiring (which hurts the service) saving on wages but growing pensions more
* Where is the bankruptcy laws that where promised and supposed to be implemented under IMF/EU?
* Where is the house price database, and no that joke of an index from CSO, Revenue are sitting on all the sales data going back for a very long time, where is the transparency that was promised?
* What is to prevent politicians from engaging in policies of bribing the electorate with goodies in exchange for votes, FF havent gone away you know and still floating about like bad smell, bidding for their time.


So once again, 3 years on, what has been learned and what has been done?

As the world is about to enter a second recession do we really hope to ride it all out on exports alone? What happens to the economy if Obama finally closes the loophole for US companies and offers an amnesty as is reported in the Business & Finance magazine? what then we grow some spuds??

The real economy in Ireland is alive and well and it's still working away producing goods and services and earning revenue for the country.

The problems, however, are not inconsiderable. As you point out, neither the FF government or the current government has grasped the issues and attempted to deal with them in any meaningful way, apart from what amounts to little more than window dressing.

Ireland's problems stem from the enormity of it's debts, and the solution from the EU, the IMF, and the ECB is to add to those debts as a solution.

That said, it's hard to know what Ireland can do at this point apart from hope that the EU or someone outside comes to the rescue. It would be great if Ireland eventually got a government which could actually inspire confidence and actually do something, as the likely beneficiaries of the growing discontent with the mainstream parties is likely to be, in part, Sinn Fein, whose policies would damage the country even further.

hinault

The Central Bank of Ireland appear to be upbeat:

"The Central Bank says the Irish economy should achieve growth of around 1% of GDP this year. It has revised upwards its growth estimate to 1% from its earlier estimate of 0.8% on the back of a stronger than expected economic performance in the second quarter.
In its latest quarterly economic bulletin, the Central Bank said that growth in the first half of the year was so strong that even the emerging evidence of a slowdown in the international economy in the second half will not tip the Irish economy back into negative territory.

But the bank has revised its growth estimate for next year downwards to reflect much weaker demand in Ireland's main trading partners in 2012. It now expects GDP growth next year of 1.8% compared to earlier forecasts of 2.1%.
GNP, which better reflects the domestic economy, is expected to contract this year by 0.4%, and grow next year by 0.7%.

The Central Bank expects incomes and employment levels to stabilise next year, but unemployment will remain high at 14%, with a small decline in unemployment due to emigration or people dropping out of the labour force.
The Central Bank also argues the case for making a bigger budget adjustment than the €3.6 billion agreed for next year in the EU-IMF programme. It says bringing forward some of the planned adjustments to 2012 could build some resilience into the public finances, and would lower the overall cost of the adjustment programme by reducing debt levels faster and saving interest costs.

It also feels the negative impact of a faster adjustment may no longer be significant, because households have a very high savings rate anyway, because of uncertainty over the economic situation.

But it cautions against overloading the adjustment programme. It says personal consumption - which accounts for roughly half the economy - will fall by 2.6% this year, and by 0.8% next year.
It also expects housing completions this year of 10,000 units - down almost 90% from the peak year of 2006. It expects housing output to remain at this level next year, consistent with a near 10% fall in investment.

In terms of competitiveness, the bank says more competition is needed in private sector service providers, as well as in the public sector.
It says the economic changes are significant, but pushing ahead with them would send a signal of the adaptability of the Irish economy, increasing confidence among investors, which it says would be beneficial to the adjustment process"
http://www.rte.ie/news/2011/1004/economy-business.html

mrgaa1

given the current issue with Greece and their alleged default about to happen I'd say the corners will be none existent as we fall into the abyss.

I've said this before and I'll say it again - a world-wide reset to zero of all debt should take place. The amount of money owing does not exist and will not exist. The debt is held in numbers on computer systems. So a simple reset should do it - of course there will have to be stringent regulations in place to avoid this but look we don't owe anything to anyone outside this planet so we as a civilisation should sort it out. Peoples lives are being ruined - are our governments here to ensure we all live poor lives?

murphaph

mrgaa1 wrote: »

I've said this before and I'll say it again - a world-wide reset to zero of all debt should take place. The amount of money owing does not exist and will not exist. The debt is held in numbers on computer systems. So a simple reset should do it - of course there will have to be stringent regulations in place to avoid this but look we don't owe anything to anyone outside this planet so we as a civilisation should sort it out. Peoples lives are being ruined - are our governments here to ensure we all live poor lives?

Do you have any savings? Would you be happy if the debtor (the bank, credit union etc.) reset their debt to you to zero and your savings vanished?

easychair

hinault wrote: »

The Central Bank of Ireland appear to be upbeat:

"The Central Bank says the Irish economy should achieve growth of around 1% of GDP this year. It has revised upwards its growth estimate to 1% from its earlier estimate of 0.8% on the back of a stronger than expected economic performance in the second quarter.

It now expects GDP growth next year of 1.8% compared to earlier forecasts of 2.1%.
GNP, which better reflects the domestic economy, is expected to contract this year by 0.4%, and grow next year by 0.7%.

The cost to the Irish economy, if the growth figures are attained, will be more tens of billions in borrowings. Anyone can "grow" any business by borrowing billions, the problems occur when it comes to paying it back. It's exactly this principle which was used by Anglo Irish Bank.

The other part of the picture is what effect inflation will have on the growth. If an economy grows at 1%, and inflation is at 2%, that's a net "growth" of -1%.

thebman

easychair wrote: »

The cost to the Irish economy, if the growth figures are attained, will be more tens of billions in borrowings. Anyone can "grow" any business by borrowing billions, the problems occur when it comes to paying it back. It's exactly this principle which was used by Anglo Irish Bank.

The other part of the picture is what effect inflation will have on the growth. If an economy grows at 1%, and inflation is at 2%, that's a net "growth" of -1%.

What businesses are borrowing tens of billions?

I was under the impression many businesses were declaring they were going under as they couldn't' get credit.

hinault

easychair wrote: »

The cost to the Irish economy, if the growth figures are attained, will be more tens of billions in borrowings. Anyone can "grow" any business by borrowing billions, the problems occur when it comes to paying it back. It's exactly this principle which was used by Anglo Irish Bank.

Is the CBI growth figure perdicated on borrowing?

easychair wrote: »

The other part of the picture is what effect inflation will have on the growth. If an economy grows at 1%, and inflation is at 2%, that's a net "growth" of -1%.

Good point.

easychair

hinault wrote: »

Is the CBI growth figure perdicated on borrowing?

Of course. If the Irish Government doesn't borrow the €14 billion or so it needs to keep paying all the salaries of those dependant on the public purse, the effect on the economy will be to take €14 billion out of the economy, which would be €14 billion less spent in the economy. That would have the effect of very negative growth.

djpbarry

easychair wrote: »

The cost to the Irish economy, if the growth figures are attained, will be more tens of billions in borrowings. Anyone can "grow" any business by borrowing billions...

Ignoring for a moment that businesses rarely borrow "billions", surely any growth that results depends on how those borrowings are invested in the business?

ei.sdraob

djpbarry wrote: »

surely any growth that results depends on how those borrowings are invested in the business?

So into what productive areas did our government(s) in the last 3 years "invested" the extra 100 billion or so of new debt they ran, do tell


What would you call a business that borrows lets say 100,000 then blows third of this on wages with no productivity improvements (ps), gives third away (welfare) and spends the remainder on hookers and coke (banks), all while doing only 20,000 in sales