| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 Asia Economy


How to use our RSS feed

Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.


Finfacts is Ireland's leading business information site and you are in its business news section.

We provide access to live business television and business related videos from: Bloomberg TV; The Wall Street Journal; CNBC and the Financial Times. Click image:


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax 2008

Climate Change Reports

Global News

Bloomberg News

CNN Money

Cnet Tech News


Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News




Content Management by interactivetools.com.

News : Irish Last Updated: Apr 24, 2009 - 5:31:05 PM

Irish Economy: Davy cuts 2008 growth to 1% and 2009 to 2% because of tighter credit availability, exchange rate appreciation and no interest rate relief
By Finfacts Team
May 28, 2008 - 8:50:57 AM

Email this article
 Printer friendly page

Irish Economy: Davy Stockbrokers has  cut its macro forecasts for Ireland for 2008 and 2009  and now expects GNP volume growth of 1%, revised from 1.7%, in 2008 and 2% in 2009, cut from a level of 3.4%.

Economist Rossa White says that the Irish economy has been hit with a triple whammy early in 2008: tighter credit, ECB hawkishness and associated exchange rate appreciation.

Conditions have deteriorated for households in 2008 and the forecast for consumer spending was previously 2.5% in volume. But Davy now expects only 1% thanks to a weakening labour market, tighter credit, higher inflation and a negative wealth effect. Davy says at least goods exports were relatively robust in volume terms in the first quarter: "we stick with our forecast absent any data on services year-to-date." it says.

The bigger revision to growth forecasts is for 2009:Davy projects 2% real GNP compared with 3.4% before. New home sales improved earlier in the year, but have slowed recently as a result of tightening mortgage availability and no short-term prospect of interest rate cuts. The broker now expects 25,000 house completions in 2009 versus a previous forecast of 40,000. The unemployment rate is set to reach 6.1% by year-end and 7% by end-2009 — the rise limited by lower net migration. But the Government is not going to have as much fiscal room as was previously thoughtt: based on its Budget 2008 estimates, it may breach the 3% deficit limit in 2009. Davy says that the recovery towards trend may be delayed until 2010.

Davy on the Irish economy Report

Rossa White's summary on report:

Trimming our 2008 GNP volume growth estimate to 1%

  • We have cut our 2008 growth forecast due to deteriorating conditions for consumers. Our forecast for consumer spending was 2.5% in volume, but we now expect only 1% due to a weakening labour market, tighter credit and a negative wealth effect.

  • As a result, we have trimmed our GNP volume growth estimate for 2008 to 1% from 1.7%.

  • Goods exports were robust in Q1, and we are sticking to our forecast in the absence of any data on services year-to-date.

Reducing our 2009 GNP forecast to 2% from 3.4%

  • We are forecasting 2% real GNP for 2009 compared with 3.4% previously.

  • We do not expect the housing market to bottom in 2008. We now forecast 25,000 house completions in 2009 versus our previous figure of 40,000. That subtracts over 1% directly and indirectly from GNP.

  • We have pencilled in a 10% decline in private non-residential building for 2009.

  • The unemployment rate is set to reach 7% by year-end 2009 – the rise limited by lower net migration.

  • Based on its Budget 2008 estimates, the government may breach the 3% deficit limit in 2009.

The economy may not bounce back to trend until 2010

  • In our research note Beyond the housing shock (February 26th 2008), we argued that potential growth in Ireland is a healthy 3.5-4%. However, we do not see the economy growing in line with trend until 2010.

Related Articles
Related Articles

© Copyright 2009 by Finfacts.com

Top of Page

Latest Headlines
Ryanair revises up full-year profit guidance
AIB bank profitable in third quarter
Ryanair announces half-year profits up 32% to €795m
Ryanair benefits from improved customer service
Ryanair to buy 100 new Boeing 737 MAX 200
Finfacts server migration Thursday
State-owned Allied Irish Banks reports H1 2014 profit as bad loan charges plunge
Ryanair reports profit in its financial first quarter soared 152%
UK firm opens van dealership in Dublin
Ryanair reports 8% fall in full-year profit; US services to commence in 2019
Global Financial Centres Index: New York overtakes London; Dublin slips to 66 of 83 cities
Bank of Ireland reports “significant” improvement in 2013 results
Sale process of IBRC UK projects Rock and Salt completed
CRH says 2014 will be year of profit growth after reporting 2013 loss
Ryanair reports third-quarter loss
Irish Water says it saved €100m in setup costs
RSA Insurance fires two Irish executives for large loss/ accounting irregularities
Bank of Ireland will have to raise provisions by €1.4bn; AIB says it's "well capitalised"
CRH reports slightly improved third quarter
Central Bank says ownership of Newbridge Credit Union transferred to permanent tsb
Ryanair reports H1 profits rose by 1% to €602m
Dublin Web Summit: Irish Stock Exchange and NASDAQ OMX announce dual listing plan
Irish pension managed funds returned to growth during September
Dan O’Brien resigns as economics editor of The Irish Times
Central Bank says no action required on Anglo tapes revelations
Ryanair flew 9m passengers and Aer Lingus carried 1.1m in August
UK Competition Commission says Ryanair must cut Aer Lingus stake to 5%
CRH reports H1 2013 revenue dip and loss
Vodafone refunded UK after discovery of Irish tax haven deal
RBS reports half year profit; Ulster Bank posts reduced loss
Bank of Ireland cuts pretax losses in HI 2013 to €504m
Irish State-owned Allied Irish Banks reports losses of €758m in H1 2013
Service Announcement
Irish managed pension funds declined in June
VHI reports 2012 surplus of €54.3m; Health insurance made loss
Ex- Elan director says management / board "not competent to run a business"
Aer Lingus to put €140m in employees pensions fund; Ryanair apoplectic
Wednesday Newspaper Review - Irish Business News and International Stories - - May 22, 2013
Tuesday Newspaper Review - Irish Business News and International Stories - - May 21, 2013
Ryanair, Europe’s biggest low cost carrier, announced Monday record annual profits of €569m - - up 13%