| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


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.

Welcome

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

Links

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

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : Irish Economy Last Updated: Jan 11, 2012 - 7:45 AM


Ireland Economy 2012: Irish Economic Outlook; The debt/GDP ratio will rise to 124% in 2014
By Finfacts Team
Jan 10, 2012 - 1:41 PM

Email this article
 Printer friendly page

Ireland Economy 2012: Goodbody today published its Irish Economic Outlook for 2012, identifying six key issues to watch out for in the coming twelve months. The brokers expect GDP (gross domestic product) growth of 0.7% (previously 1.2%), but GNP (gross national product  -- mainly excluding profits of the multinational sector) is expected to decline by 0.8% (previously +0.7%), while domestic demand will contract by 2.6%. It is estimated that the debt/GDP ratio will rise to 124% in 2014.

Goodbody economists Dermot O'Leary and Juliet Tennent say that interest rate cuts will help Irish homeowners in 2012, but studies have shown that the more important determinants of arrears trends are employment and incomes. They are forecasting that the ECB will cut rates to 0.5% in Q1 2012. With 53% or €70bn of Irish mortgages on tracker rates, each 25bp cut results in €175m interest savings for households over the full year. Along with the December reduction feeding through in January, this would result in savings of c.€525m to households or 0.4% of 2010 disposable income. If the banks were to pass the cuts on in full to standard variable rate mortgages a further €315m could be saved (0.25% of 2010 disposable income).

Ireland’s first full year in an IMF/EU programme provided mixed results... -In contrast to other programme countries, 2011 saw the Irish economy return to modest economic growth. However, it is a fragile economic recovery totally dependent on net exports. The hurdles of stability in the banking sector, a labour market recovery and the question of debt sustainability have yet to be fully negotiated.

...but forecast downgrades... -The economists  are downgrading their forecasts for growth for 2012 on the back of trade and domestic demand. They expect GDP growth of 0.7% (relative to 1.2% previously), but GNP is expected to decline by 0.8% (+0.7% previously), while domestic demand will contract by 2.6%.

...highlight the challenges ahead, with a number of critical issues for 2012... -Goodbody identifies six key issues to watch out for in the coming twelve months: (i) A possible referendum; (ii) debt sustainability and the possible restructuring of the promissory notes; (iii) Ireland’s aims to tap the debt markets; (iv) banking trends; (v) fiscal consolidation efforts; (vi) a continuation of the falling unit labour costs and an improving current account position.

...and focus will have to move from austerity to growth -Goodbodyestimates that the debt/GDP ratio will rise to 124% in 2014, while the deficit will not reach the 3% of GDP deficit target by 2015. The Fifth Review of Ireland’s Programme, starting today, must focus on the issue of growth and debt sustainability, rather than just austerity. A restructuring of the c.€30bn in promissory notes provides an opportunity to reduce debt to a more sustainable level without the difficulties that Greece is currently experiencing with PSI (private sector involvement). Another important issue is the speed at which the banking system is deleveraging. The economists argue that this process of bank deleveraging should be slowed, but this will require further assistance by Europe for Ireland’s banking system.

Get access to the original report...

To access the original pdf report and continue reading this article, subscribe to Finfacts Premium for the low annual charge of €25.

It's a simple fact that in the prevailing economic climate, the provision of high quality content cannot be sustained through advertising alone.  If you are a regular user of Finfacts, 50 euro cent a week is hardly a huge ask to  support the service.

This article can be accessed here.

Related Articles


© Copyright 2011 by Finfacts.com

Top of Page

Irish Economy
Latest Headlines
Ireland’s Stability Programme 2014 Update published; Noonan still hopes to cut income tax
Irish Economy 2014: Goodbody hails “A Jobs Friendly Recovery”; Wants austerity to stay
Irish Economy: Data confirms jobs in foreign-owned exporting firms in 2013 below 2000 level
Irish Economy 2014: Department of Finance wants tax rises; Noonan wants tax cuts
Irish Economy: Budget deficit was 7.2% in 2013
Irish Economy 2014: Merchandise exports up 1% in February
OECD BEPS Project: Ireland should embrace corporate tax reform
Irish Economy 2014: Reliable sectoral jobs data missing for first time in 60 years
Irish Economy 2014: ESRI says growth will remain strong in 2014 and 2015
Rise in Irish jobs vacancies in first quarter
Irish Economy 2014: Consumer sentiment slightly down in March
Irish Corporate Tax: Government begins publicity offensive on tax with irrelevant paper
Irish Economy 2014: Bord Gáis Energy Index rises 1% in March; Up 41% from start 2010
Irish Economy 2014: Ibec forecasts robust growth in tax-related services exports
Irish Economy 2014: Industrial production up; Services dip contrary to PMI
Irish Economy 2014: Central Bank expects GDP to grow 2% this year
Irish Economy 2014: Claim IFSC firms employ 35,700 - official data at 23,300
Irish pension managed funds returned 1.9% in Q1 2014
Alexion Pharma International Trading of US to add 200 jobs in West Dublin
Corporate Tax: OECD's Saint-Amans says "Double Irish Dutch" sandwich tax scheme will be axed
Irish Economy 2014: Services PMI accelerates in March but official data more muted
Irish Economy 2014: Q1 Exchequer Returns income tax up €4m on target despite jobs growth
Irish Economy 2014: Numbers on Live Register/ activation programs in March at 22% of workforce
Irish pension managed funds index up only 0.12% in March 2014
Ireland is high cost business location; Labour, electricity, business service costs, rising
Irish Economy 2014: Manufacturing PMI rises in March; Misses impact of drugs patent cliff
New Irish startups at average of 127 per day in Q1 2014 -- reality check?
Irish Economy 2014: Retail sales volume dipped in February
Annual money laundering in Ireland at least €3bn
Ibec begins PR campaign for income tax cuts
Corporate Tax Reform: OECD says Ireland/ India top global ICT services exporters
Corporate Tax 2014: Irish tax partner forecasts influx of foreign firms to cut tax burdens; Really?
Average Irish land price in 2013 fell to €9,400 an acre & €23,200 per hectare
Irish Economy 2014: Merchandise exports fell in January
Corporate Tax & Ireland as Doormat: Enda Kenny offers personal support service for US business
Irish adjusted GNP in 2013 estimated at 1% compared with official level of 3.4%
Irish Economy 2014: Consumer prices fell in year to February
Irish Economy 2014: GDP shrunk in 2013; Tax-related services exports up €4bn
Recovery proceeds in advanced economies; Mixed in emerging economies
Irish Economy 2014: Energy index falls 5% in February helped by high winds, mild weather