Growth predictions revised downwards for Ireland

| October 4, 2010 | 0 Comments

The central bank of Ireland has today predicted the economy will expand by just 0.2% - lower than its previous forecast of 0.8%.

In comparison, the Government expects growth of 1% for 2010 as a whole, however, a further forecast is due later this month.

The revised projection from the central bank comes as the former “Celtic Tiger” economy has a ballooning budget deficit of 32% of GDP this year.

The Irish Government is proposing to get the deficit below 3% of GDP by 2014 to keep within euro zone rules.

The deficit has spiralled out of control after the country’s banks have drained the economy due to massive bailouts.

Meanwhile, commenting on its revised forecast, the bank said: “Against the background of sharply increased concerns about fiscal sustainability, the main priority in the short term is to ensure that the 2011 budget credibly demonstrates the first step of a reprogrammed tighter fiscal plan.”

Many analysts are of the opinion that Ireland will fall into recession again. Figures last week revealed manufacturing activity contracted in September, with the purchasing managers’ index falling to 48.4 in the month, down from 51.1 the previous month.

Any reading below 50 means the sector is contracting.

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