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.

IMF managing director Christine Lagarde and Finance Minister Michael Noonan (File photo) Virginia Mayo/AP/Press Association Images
IMF

IMF: Irish economy to grow but unemployment will remain high in 2013

The International Monetary Fund has warned of a global economic slowdown in its latest World Economic Outlook which notes our own “bumpy recovery”.

THE INTERNATIONAL MONETARY Fund (IMF) has cut its global growth forecast for this year and next and warned that government policies have failed to restore confidence.

In its latest World Economic Outlook published today, the Washington-based organisation says that that the global economy will grow by 3.3 per cent this year, down from its July estimate of 3.5 per cent.

It predicts that Ireland’s economy will be one of only a few in the eurozone to post growth this year and acknowledges the country’s “bumpy recovery”.

Global economic growth will only hit 3.6 per cent next year which is lower than the 3.9 per cent predicted in July.

However both of these forecasts are based on the assumption that European leaders get a handle on the crisis afflicting countries like Spain and that politicians in the US reach a deal that will avoid harsh spending cuts and taxes that automatically kick-in in January to deal with its spiralling deficit.

The IMF says: “The most immediate downside risk — that delayed or insufficient policy action will further escalate the euro area crisis — remains in place.

It adds: “In the United States, it is imperative to avoid excessive fiscal consolidation (the fiscal cliff) in 2013, to raise the debt ceiling promptly, and to agree on a credible medium-term fiscal consolidation plan.”

Ireland

For Ireland, the IMF says that it expects it to be the only bailed out eurozone country that will post growth this year but acknowledged that it is a “bumpy recovery”.

“Except for Ireland, which is in a bumpy recovery, the recessions in the economies of the euro area periphery have been deeper, and recovery is generally expected to begin only in 2013, once adjustment moderates,” the Fund says.

Gross Domestic Product (GDP) in Ireland will grow by 0.4 per cent this year and 1.4 per cent next year, the IMF says, with unemployment expected to come at around 14.8 per cent this year.

This will fall only moderately to 14.4 per cent next year – the same rate that it was in 2011.

In its more detailed assessment of Ireland’s finances under the bailout programme with European authorities, the Fund has consistently said that joblessness is too high in this country.

However the slight fall in Ireland’s unemployment figures compares favourably to that of other bailed out nations.

In Greece unemployment will rise to over 25 per cent next year while in Portugal it will rise to 16 per cent next year, according to the IMF.

Read: Banks repay €3.3 billion in fees from State guarantee schemes

Read: Exchequer returns show tax take up but deficit at over €11bn

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Your Voice
Readers Comments
50
    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.