IRELAND is close to rock bottom and could see a resumption of economic growth next year, Ulster Bank economist Simon Barry has said. "The
economy is no longer in freefall and there are signs of stabilisation,"
he said yesterday, joining a growing number of economists who see signs
of life in the Irish economy after six quarters of contraction. Mr
Barry noted that core retail sales, excluding cars, have been stable
for the past three months, while the relentless rise in unemployment
seen earlier this year is slowing. He is waiting until December 17 when
new figures for economic growth will be published before revising his
forecasts. The number of houses completed in Ireland next year
will probably slump to 10,000 from 25,000 this year, and 80,000 at the
height of the boom, he added. The domestic economy would benefit
from improvements in the world economy, the economist added in the
report, which argued that another deep recession, a so-called
double-dip, was unlikely. Dangers to the global economy include
the "ongoing strains" on bank balance sheets and the likely increase in
saving rates in the US and the UK, he says. "A
key issue in the debate about sustainability is what will happen to
labour markets. In this respect it is vital that the expected increases
in output in the quarters ahead translate into an end to worker layoffs
and a resumption of hiring," Mr Barry said. Turnaround The
single most important statistic for people studying the world economy
was probably US employment, he said. The US was losing 700,000 jobs a
month earlier this year but things had improved and job losses were now
almost flat. Global recovery is being led by a sharp turnaround in Asia, the report notes. Mr Barry expects the US Federal Reserve and Bank of England
to begin raising interest rates in the third quarter of 2010 and sees
the ECB following suit later in the year, with a 0.5pc hike in the
final quarter. Sterling is likely to make some gains against the euro around the middle of next year, he added.
Source: www.independent.ie
|