Spending Review: Minister for Public Expenditure Brendan Howlin said on Monday
after a Cabinet meeting that he wanted to ensure Ministers were not
“captured” by their departments into defending existing levels of spending.
Yesterday, the IMF cut its 2011 growth forecast for Ireland from 1% to 0.5%.
Irish Insurance Federation has reported that insurance companies have made
payouts of more than €220m in compensation to home and business owners after
last winter's severe weather. Claims of almost 30,000 were made in respect of
damage caused by burst pipes.
The IMF says there's no fear of a double dip as the recovery gains strength but it warns of high unemployment in developed economies. Oliver Blanchard, chief economist at the IMF, joined CNBC for more:
Economic View: IMF forecasts now being watched more closely in Ireland -- Goodbody chief economist, Dermot O’Leary, commented - - "Forecasts emanating from the IMF in Washington have taken on a higher level of importance here in Ireland since the Fund’s arrival in late November last year. Yesterday, it published its latest World Economic Outlook. While global growth forecasts were left unchanged at a healthy 4.4% and 4.5% in 2011 and 2012, respectively, there was a notable downward revision for Ireland, albeit not unexpected.
When the Memorandum of Understanding (MoU) between the Troika (IMF/EU/ECB) and Ireland was struck last December the IMF pencilled in growth of 0.9% in 2011. It now predicts growth of only 0.5%, in line with our own estimate of 0.4% growth. For 2012, it left its forecast unchanged 1.9%. The significance of the forecast changes lies in what it means for the fiscal consolidation targets that have been agreed with the Troika. In the MoU in December, the Irish authorities stated that we 'stand ready to take any corrective actions that may become appropriate for this purpose as circumstances change.'
Quarterly reviews by the Troika determine whether any further action is necessary. One of these reviews is taking place at the current time. In our view, the most important milestones in this first review are in relation to the banking system, where important targets have been met. Interestingly, there were calls by the IMF yesterday for a cut in the interest rate that Ireland is being charged for its loans.
In relation to the fiscal targets, it is still early days and tax returns were largely in line with estimates in the first quarter of the year but there are warning signs that fiscal targets may indeed slip for the full-year, perhaps necessitating further action at the time of the second review by the Troika during the summer. At the very least, we would expect a downgrade from the Department of Finance to its 1.7% growth forecast for 2011 to arrive soon."
CEO Pay in the USA:
IMF lowers 2011 GDP forecast for Ireland but no change to expected rate of growth in 2012; little change to global estimates: Davy analyst Florence O'Donoghue comments -- "As part of its twice-yearly world economic outlook, the IMF cut its 2011 forecast for Ireland yesterday (April 11th). It is now forecasting GDP growth of 0.5% this year, down from a forecast of 0.9% back in December. A higher rate of unemployment (14.5% in 2011 compared to the previous estimate of 13.5%) and a more downbeat outlook for the key export markets of the US and UK are factors in the downgrade of economic growth projections for this year. However, the IMF continues to predict GDP growth in Ireland of almost 2% in 2012. These updated forecasts are more pessimistic than our own expectations: we are forecasting GDP growth of 1.6% this year and 2.4% in 2012.
The IMF's revised forecasts follow a similar pattern for the UK: it is forecasting growth of 1.7% this year, down from its earlier estimate of 2%, but has not changed its 2.3% growth estimate for 2012. Overall, the IMF's global economic GPD forecast is little changed, with growth of 4.4% this year expected to be followed by a 4.5% expansion next year.
Elsewhere, figures released by the CSO on April 11th indicated that on a seasonally adjusted basis, Irish manufacturing volumes in February were 2.3% down on January but unchanged on February 2010. With the exception of a spike last July, manufacturing output in Ireland has remained quite steady since the start of 2010."
In New York Monday, the Dow inched up 1 point to 12, 381.
The S&P 500 slid 0.285 and the Nasdaq slipped 0.32%.
The MSCI Asia Pacific Index fell 1.4% Tuesday after Japan's nuclear safety agency raised the severity rating of the crisis at its nuclear plant to the highest level today, comparable with the 1986 Chernobyl disaster.
Japan's Nikkei 225 dipped 1.69%; China's Shanghai composite index slipped 0.05%; Australia's S&P/ASX 200 Index slid 1.46% and the Bombay Stock Exchange's Sensex index dipped 0.97% in Mumbai.
In Europe, the Dow Jones Stoxx 600 is down 0.73% in early trading Tuesday.
The ISEQ has dipped 0.34% in Dublin.
CRH is down 1.23%; AIB has dipped 4.0% (see link to 2010 results in box above); FBD has risen 1.89%.
The euro is trading at $1.4424 and at £0.8853.
For live currency updates, check the right-hand column of the Finfacts home page.
The US dollar fell to $1.6038 per euro on Tuesday, July 15, 2008 - an-all time record.
The Baltic Dry Index, a measure of shipping costs for dry commodities, hit an all-time High of 11,771 on the 21st of May, 2008. From that time it reversed and on the 5th of December, 2008 it hit a low of 663 - - close to a 1986 low.
The BDI closed at 3,005 on Thursday, Dec 31st - - a rise of 289% in 2009. The index averaged 59% lower in 2009 than a year earlier.
On Thursday, July 15, 2010, the index fell for the 35th straight session, by 9 points, or 0.537%, to 1,700 points, Bloomberg report.
On Friday July16th, the BDI rose 20 points or 1.12% to 1,700 to break the 35-session losing streak.
On Monday this week, the BDI slipped 17 points or 1.23% at 1,359.
The Financial Times reported
earlier in January, that Australia’s flooding and fears of ship oversupply has
pushed down a gauge of the cost of hiring ships to carry coal, iron ore and
other dry bulk by nearly half since October to the lowest level since the
aftermath of the financial crisis. The Baltic Dry index, the widely watched
measure of dry bulk charter rates, fell to 1,453, nearly half the 2,784 peak
reached on October 27, 2010.
margin between the US benchmark WTI (West Texas Intermediate) used on the New
York Mercantile Exchange and Brent is over $14.
The spot price of an oz of gold is trading in New York at $1,460.10, down $3.10 from Monday's close.
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