Economic forecast revised upwards

THE only way the Government can overcome the massive shortfalls in tax receipts is by cutting public sector pay, according to Bloxham, which believes Ireland has weathered the worst of the global economic downturn.

And Bloxham’s chief economist Alan McQuaid fears increased Government taxation might choke off the potential for growth as Ireland becomes more competitive by the day as costs continue to fall.

“Deflation in Ireland is shaping up to be far more pronounced than in the rest of Europe and is forecast to average 4.5% in 2009. As a result, Ireland finds itself better placed than most to restore itself as a highly competitive nation. That said, Government policies may choke off any competitive advantages that Ireland has through over-taxation.