Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Barry Batchelor/PA Archive
Growth

Ireland's economic growth forecast to hit just 1 per cent next year

Moody’s says that the fragility of the state’s economic recovery coupled with recent eurozone pressures mean growth won’t hit the govt target for 2012.

THE RATINGS AGENCY Moody’s says it expects the Irish economy to grow by less than the government’s revised 1.3 per cent figure.

The agency described Budget 2012 and the government’s compliance to date with the EU-IMF loan agreement as “credit positive” because “they reflect Ireland’s ability and willingness” to comply with the troika’s fiscal targets.

The Budget 2012 measures announced last week included €3.8 billion in adjustments, comprised of €2.1 billion in public spending cuts and €1.7 billion in increased taxation. While delivering next year’s Budget last week, the government revised its figure for next year’s growth down from 1.6 per cent to 1.3 per cent.

However, Moody’s said that “the country still has a long way to go” before meeting its deficit target of 3 per cent of GDP by 2015.

In light of the state’s “fragile economic recovery” and the “recent worsening of euro area financial conditions”, Moody’s expects Ireland’s real GDP growth for the coming year to be 1 per cent.

Moody’s said that despite Ireland’s “progress” on the troika agreement, a number of other factors have to be taken into account when forecasting growth:

Although Ireland is making progress on its fiscal front, these positive developments must be viewed in the context of broader euro area pressures that include a deceleration of economic activity, fragile banking systems, partly dysfunctional credit markets, and policymakers’ emphasis on the conditional nature of support programmes.

“These euro area pressures weigh on Ireland’s creditworthiness,” the ratings agency added.

Read up on all of TheJournal.ie‘s Budget 2012 coverage >

Your Voice
Readers Comments
19
    Submit a report
    Please help us understand how this comment violates our community guidelines.
    Thank you for the feedback
    Your feedback has been sent to our team for review.