The Economic and Social Research Institute have released their quarterly review of the Irish economy for Spring 2010. Some highlights –
- The contraction in GNP will stop this year with 0% growth overall, although they are predicting a fall in GDP of 0.5% (this contrasts with a rise in GDP of 0.3% in Q3 2009, while GNP fell).
- In 2011 growth will return to the Irish economy with 2.75% increase in GNP and 2.25% in GDP
- Ireland emerges from deflation with CPI inflation of 0.25% in 2010, 1.75% in 2011
- High unemployment continuing to impact with negative wage growth in 2010 (-3%) and 2011 (-1%)
- Unemployment rate to peak at 13.75% in 2010
- Debt-to-GDP ratio to reach 89.5% in 2011
They predict net emigration of 60,000 in 2010 and 40,000 2011, although Constantin Gurdgiev argues that the 2011 figure could be as much as twice as high as opportunities increase elsewhere.
They estimate the total cost of recapitalising the banks to be 33 billion.
“We note that the recapitalisation needs of the Irish banks are now likely to be at least 33 billion, assuming that the State investment in Anglo Irish Bank ultimately amounts to 22 billion. In terms of net cost to the State, a figure of 25 billion is possible.”