Economic output to shrink by 14%

THE Central Bank believes economic output will shrink by a total of 14% based on GDP in the three years through to 2010.

Following a decline in GDP of 3% in 2008 the economy should contract by 8.3% this year and by a further 2.7% in 2010, the bank said.

It warned it will be 2011 before domestic demand picks due to the impact of higher taxes, declining wages and the slump in house prices and that unemployment is set to rise to 15% next year while employment will shrink back to 2005 levels.