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Irish Economy: Some Key Facts
For the second time in a generation, monumental economic mismanagement has made Ireland unprepared for a global recession. Membership of the Eurozone has only saved the country from the fate of Iceland - - double-digit interest rates and an IMF bailout. Political leaders who believed they had invented the free lunch, during the construction boom, are still in denial about the challenges in the post-Celtic Tiger period. We say "God Bless America" and President Obama, as Irish economic fortunes are overwhelmingly dependent on America's.

Irish property remains amongst the most expensive in the world and there are no government proposals to change the system of poor planning and the creation of an artificial scarcity of land, in a country that is 4% urbanised.

Bertie Ahern Taoiseach/Prime Minister 1997-2008, was the cheerleader-in-chief of the property boom:

In April 2006, he said that had listened for seven years to warnings and arguments about difficulties in the construction sector. "I think you have to look at the asset. This is the question: if you are borrowing 'x', if you sell the asset, if there's a bit of a downturn, will you get 'x' back in return? That's the issue. At the moment, there doesn't seem to be an indication [of difficulties].

"I mean quite frankly, if you had taken the advice a year ago you would have lost a lot of money. Everybody said we're going to see a huge downturn in 2005 linking into 2006 - they were entirely wrong.

In April 2007 he said: "On the other side of the election we'll get back to normality. And I think that normality will be the soft landing. The construction projections were that we will move from something like 93,000 houses to 80-something. Now that's not going to create any kind of a difficulty."

In July 2007 he said: "Sitting on the sidelines, cribbing and moaning is a lost opportunity. I don't know how people who engage in that don't commit suicide because frankly the only thing that motivates me is being able to actively change something."

In September 2007 he said: "But there is no place for negativity. No need for any pessimism. Above all, there is no place for politically motivated attempts to talk down the economy and the achievements of our people across all sectors."

Key Statistics
In the period 1977-1982, the first of 2 occasions in a generation that the Irish economy was monumentally mismanaged, the national debt trebled.

In the period 2007-2012, the National Debt will also treble, according to Dept of Finance estimates.

  • Dec 2008: Irish National Debt increased to €50.7bn/32.5% of gross national product (GNP) -  up from 23.3% in 2007
  • Dec 2008: General Government Debt/GDP ratio at 41.3% up from 24.8% in 2007. Euro rules limit GGD/GDP ratio is to 60%
  • Dec 2008: Annual Exchequer Deficit/GDP @ 6.25% compared with Euro rules target of 3% and 9.25% in 2009; Dept of Finance forecasts  General Government Debt of 90% of GDP by 2013 if public borrowing isn't cut.
  • Borrowing of €20bn required in 2009, if current spending trends continue, with €11bn of this borrowed to pay for current spending and €9bn borrowed to pay for capital projects. If this process continues unchecked, borrowing for current spending will increase from €11bn to €17bn by 2013.
  • Dec 2008: Irish Private Sector Credit (ex IFSC issues)/GNP 200%; Dec 2003 100% (Goodbody est) -  Germany & France @ 105%; Finland @ 84%. Irish credit growth has been funded out of external resources, with net external liabilities rising from 12% of GNP in 2003 to 67% of GNP at the end of 2007
  • Dec 2008: Irish household debt @178% of disposable income - up from 48% in 1995 (Goodbody est)
  • Irish GNP 2008: €156.3bn -  Dept of Finance
  • Irish GDP 2008: €187.4bn  - Dept of Finance
  • Population 4.2m - Census of Population 2006

Dept of Finance update on the Euro Stability Pact for European Commission - Jan 09, 2009

CSO detail of National Accounts - Dec 18, 2008

Gross Domestic Product (GDP) is the total value of all goods and services produced in an economy in a given time period, whether by domestic or foreign-owned firms, native or migrant workers.

Gross National Product (GNP) is the total value of all goods and services produced in an economy in a given time period which accrues to the residents of a country, be they resident there or overseas.
The profits made by CRH, which has over 40,000 employed in the US,  are counted as part of Irish GNP - - even though over 80% of its shareholders are foreign residents.

The difference is made up of what are termed net factor flows, which includes net profit repatriation by multinationals and interest on the foreign component of the national debt. In Ireland's case, GDP is significantly larger than GNP because of the large US multinational presence there.


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