| 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

Follow Finfacts on Twitter

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.


Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

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.

Analysis/Comment Last Updated: Dec 18, 2012 - 2:46 PM

Irish Economy: Economists announce new dawn; "Kickstarting" growth from behind a desk! ECB director terms them delusionists
By Michael Hennigan, Founder and Editor of Finfacts
Jan 19, 2010 - 8:30 AM

Email this article
 Printer friendly page

Fianna Fáil Parliamentary Party meeting in Athlone - 14th September 2009: Minister for Finance Brian Lenihan speaking to Brendan Keenan, Group Business Editor, Independent Newspapers

Irish Economy:  Good news at last as economists announce a new dawn after a winter of gloom. Lower costs are already "kickstarting growth" and from behind a desk, increasing shares in export markets have already been discerned from recent cost reductions. However, a European Central Bank (ECB) executive director on Monday, said such people are delusionists. One or possibly two more tough Budgets are needed and rising exports will power rapid growth from 2012.

Many people have wondered if a dyed-in-the wool conservative political class and their acolytes in the senior public service would not be amenable to needed reform after the calamitous crash of the Celtic Tiger, what would it require to get real change?

Well, what's there to fret about now? Can't we return to traditional values, a broken governance system and business as usual? Shur, it will all work out in the day!

As for "transformational" public service reform, the options price on that will surely rocket.

We may not even get bad weather for another 30 years!. Lessons to learn my elbow!

The Irish Independent reports that ESRI economist John FitzGerald said: "We will see a vigorous recovery in 2012." He added that the economy could expand by as much as 5% a year between 2012 and 2015.

Speaking at the 'Checkout' annual retail conference in Dublin yesterday, he said a short-term boost to the economy was likely to kick in during 2012 as consumers once again started spending money. Workers have been pouring money into savings accounts, building financial security nets in case they lose their jobs as the employment rate hit 12.5%.

Dr Alan Ahearne, adviser to the Minister for Finance said a number of factors gave rise to optimism. He said there was a 5% improvement in unit labour costs since the autumn. "This is already kickstarting growth. We are starting to gain market share but we need to do more as we lost our competitiveness during the boom years," he said.

Tossed in the stew, is a reference to a special report from Bank of Ireland economist Dan McLaughlin who forecast that a substantial increase in exports in 2012 would help a recovery.

In fairness to Dan, he has curbed the unbridled optimism of the halcyon days of the bubble but give it time. Whether he still believes as he did in 2007, that the economy wasn't unbalanced, we don't know or will we know.

As for the three referred to "experts,"  when credible forecasts for economic growth in the United States and the Eurozone in 2011, are less than 2010, because of the exits from governments' and central banks' massive stimulus programs, what value should we give to Irish forecasts for 2014 or 2015?


How can forecasts be taken seriously without reference to the very uncertain economic outlook for the developed world?

The prognostication on exports is dependent on the activity of the foreign-owned sector in Ireland.

It's easy to refer to "boring" European growth of 3% in future years compared with Irish growth of 5%.

As for the claim from Alan Ahearne: "We are starting to gain market share.. ." - -  he appears to have bought into the official spin that permeates all statements on exports.        

Calling a spade a spade, there is one word for it: bullshit.

How can he make such a statement from Government Buildings, in the absence of credible data to support the claim?

When John FitzGerald issued the last Medium Term Review in early 2008, he had used $70 a barrel as the reference price for crude oil.  Within months, the price had doubled.

A vigorous recovery globally will result in another rise in commodity prices but more importantly, looking at the coming years, for a country like Ireland dependent on exports, it must have regard to the financial problems that confront the rich countries.

The rise in public debt and bank deleveraging will make it difficult for the global economy to return to past growth rates, European Central Bank Executive Board member Lorenzo Bini Smaghi said on Monday.

Bini Smaghi said he did not expect the global economy to return to its pre-crisis situation, as this had been unsustainable.

"My feeling is that those who think like that are deluding themselves," he told Frankfurt's Chamber of Commerce and Industry.

UK Chancellor of the Exchequer Alastair Darling told the Financial Times on Monday that halving the deficit in four years was “non-negotiable” and that he intended to use his Budget - - expected in March - - to give more detail on where the axe will fall.

Labour has promised to protect health, education, police and overseas aid budgets, prompting the Institute for Fiscal Studies to predict real terms cuts of 16% for all other departments.

Darling declined to deny reports that the Treasury had put the figure at 17%. “The Treasury has hundreds of forecasts and hundreds of different permutations,” he said.

Surely that matters for the outlook of indigenous exporters dependent on the UK market?

SEE today's Finfacts article: Rich countries face years of belt-tightening to reduce high debt levels; Deleveraging following crises lasts six to seven years on average

We lost export related jobs in the period 2000-2009 and in the years ahead, against a more difficult economic backdrop, it's going to be all grand!

SEE Finfacts article, Dec 2009: The challenge of creating 160,000 new Irish jobs

We at Finfacts would like to join in the party and would indeed welcome rising income ourselves. Growth will return to the Irish economy in 2011 but we well know what is going to happen if the ignorant cheerleaders of the bubble and the vested interests return to dominate politics and the media.

As for the potential of big export opportunities, in the key emerging markets of China and India, goods exports to China from Ireland are less than we export to Switzerland, while only about 6% of the shipments to China, are from Irish owned firms. Total exports to India are insignificant.

Caution would surely have the potential to have some long-term value when no reform worth mentioning has been tried so far. We thought in the recent past that we had invented the free lunch. Let's not fall for Ballymagash economics again.

SEE: Finfacts articles, Jan 2010:

Irish and Eurozone cost competitiveness 1999-2009

Foreign-owned firms responsible for 89% of Irish tradable goods and services exports in 2008; Jobs in sector down 44,000 since 2000

Related Articles
Related Articles

© Copyright 2011 by Finfacts.com

Top of Page

Latest Headlines
Disastrous 44-year War on Drugs and ignoring the evidence
HSBC & Tax Evasion: France/ Belgium issued criminal charges; UK/ Ireland nothing
Analysis: Germany world's top surplus economy; UK tops deficit ranks
Facts do not always change minds - can even entrench misinformed
Finfacts changes from 2015
Facts of 2014: Guinness not Irish; 110 people own 35% of Russia's wealth
In defence of dissent and Ireland's nattering nabobs of negativism
Dreams of European Growth: France and Italy facing pre-euro economic problems
Globalization's new normal needs permanent underclass - Part 1
MH17 and Gaza: who is responsible?
Israel vs Palestine: Colonization set for major expansion
Aviva Ireland's 'fund' runs dry and life cover to die for
We wish Martin Shanahan - new IDA Ireland chief - well but...
Ireland as an Organised Hypocrisy is in lots of company
Dr Peter Morici: Friday’s US jobs report won’t alter Fed plans to raise interest rates
Own Goal: Could FIFA have picked worse World Cup hosts?
Ireland: Spin and spending will not save bewildered Coalition
Irish Government parties set for 2-year vote buying spending spree
European Parliament: Vote No. 1 for Diarmuid O'Flynn in Ireland South
Dr Peter Morici: US April jobs report may show 215,000 added in April
Dr Peter Morici: Hardly time to call Obamacare a success
Celtic Tiger RIP: Change in conservative Ireland six years after crash
Dr Peter Morici: Five things to know about the Fed’s obsession with inflation
In age of acronym/ Google, Trinity to rebrand as 'Trinity College, the University of Dublin’
Hoeness case part of ‘painful’ change for Swiss bankers
Dr Peter Morici: The Cold War was only on vacation
Dr Peter Morici: US economy drags on Obama's approval ratings; Don’t look for changes in Washington
Dr Peter Morici: Bitcoin debacle shatters the myth of virtual money
Dr Peter Morici: US Tax Reform: Eliminate the income tax and IRS altogether
Wealth threatens the simple life in Gstaad, Switzerland
Irish journalists get cash payouts over 'homophobic' defamation claim
Irish academics get lavish pension top-ups as private pensions struggle
Dr Peter Morici: Inequality is President Obama’s highest priority, but solutions are naive
The Finfacts Troika: Better times ahead and a hangover to forget?
Dr Peter Morici: Volcker Rule arrives with the hidden jewel in Dodd-Frank financial reforms
Ireland's toothless fiscal watchdog threatens to bark
Analysis: Germany's current account surplus - - Part 2
The end of western affluence?
Bono's hypocrisy on Africa, corporate tax avoidance in Ireland
France like Ireland is run for the benefit of the old