Tough year ahead as demand drops off

THE Department of Finance published its annual Economic Review and Outlook for 2002 last week.

Official growth forecasts for 2002 have been revised down with real GDP now expected to rise by 3.6%, compared with the forecast of 3.9% underpinning the Budget for 2002.

A key element in this downward revision is projected slower growth in real personal spending of 4.3% compared with the original forecast of 5.7%. Even this revised figure lower forecast for personal spending may be too optimistic. Retail sales figures for June, published last Friday, show that sales volume fell by 1.1% in June over May and by 1% in the second quarter over the first quarter. Year on year, the volume of sales fell by 0.2% in the second quarter.