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The Briefcase: Russia freezes us out, house prices and drinking on the job

This was the week in business.

Image: AP/Press Association Images

FRIDAY ROLLS AROUND once again, and The Briefcase is here to give you a round-up of all that’s happened in the world of business, economics, and (this week only) inebriated labour.

Need to know

To Russia with love

Russian Prime Minister Dimitry Medvedev announced a full embargo on food products from the EU, US and other Western countries, throwing the export sector – and particularly companies that trade heavily with Russia – into crisis mode.

Who’s going to be badly affected by this in Ireland? Early indications were that much of the dairy industry’s dealings would be unaffected, but prepared foods and meat appear to be firmly in Russia’s firing line.

Agriculture Industry Source: Eamonn Farrell/Photocall Ireland

Irish food producers are only pawns in this geopolitical game, which will only heighten frustrations as the sanctions could go on for at least a year.

While current exports are pretty minor, accounting for around 2.5% of the total, Simon Coveney was quick to point out that Russia looms large in the plans of many exporters, who had targeted the country for future expansion.

Farmers will also be wary of the prospect of a flood of cheap consumer groceries that had been intended for Russia now looking for a home in the European market, depressing prices here.

ESRI wades in

It was a big week for the ESRI, with the State’s go-to think tank releasing no fewer than three missives on the economy.

The brains trust had both good and bad news: first up, it predicted that unemployment will dip below 10% next year, down to around 9.8%.

File Pics The seasonally adjusted figure for the number of people on the Live Register has fallen below 400,000 for the first time since May 2009. Source: Leon Farrell/Photocall Ireland

In addition to this Gross National Product, which excludes our sizeable international sector from measurements of economic well-being, is predicted to grow by around 3.5%.

However, in the same report, the ESRI said that the euro zone’s weak growth prospects are a concern, and flagged low investment, high unemployment and weak credit as major problems.

The think-tank also played its part in ensuring that the long running housing saga runs on through the summer.

Despite assuring us that another bubble is not underway, the ESRI did warn that there is a “significant housing shortage” in Dublin, and said that 86% of the houses to be built over the next ten years will be in or around the capital.

It also said that house prices in the Irish market are undervalued, despite the recent rapid escalation in property prices.

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To a point, the ESRI is correct in saying that there’s no bubble, with the tightness of credit meaning rapid price increases are more likely the result of limited supply.

Nonetheless, the peculiar relationship between the Irish and property surely means that an abundance of demand, rapidly increasing property prices, and the looming threat of other hikes to costs of living is a heady – and volatile – mix.

Nice to know

President Martelly visits Ireland Source: Laura Hutton/Photocall Ireland

Now you know

One for the road

We may all occasionally feel that our jobs are driving us to drink, but research published this week shows that some 44% of us have actually been under the influence at work.

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We’ll drink to that. Just don’t tell the editor…

Read: Good numbers, burnt bondholders, and the ghosts of Irish banking>

Read: A US president, the Budget and definitely not a housing bubble>

About the author:

Jack Horgan-Jones

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