Economic recovery could be three years away, says ESRI professor

IRELAND may have to wait another three years before seeing any economic recovery, delegates at the Small Firms Association (SFA) annual conference in Dublin Castle, heard yesterday.

Professor John Fitzgerald of the Economic and Social Research Institute (ESRI) said that the country will recover in time, but if the Government doesn’t reduce the country’s cost base it could be “a long and painful process”.

“Ireland has a future, providing certain things are done. I don’t think there will be a major turnaround this year or next year,” said Prof Fitzgerald, before identifying 2011 or 2012 as the likely date for national recovery.

Speaking as part of a broader panel discussion — which also included Microsoft Ireland managing director, Paul Rellis and former European Parliament president, Pat Cox — Prof Fitzgerald said that it probably won’t be until 2011 until we see a lowering in the unemployment level here and not until 2015 that something more akin to full employment is seen again.

With regard to the main ingredients needed to bring about recovery and growth, he added: “We need a banking system which works and a budget, this December, that sorts things out and makes substantial cost reductions. The recovery will be led by exports and largely depends on cost control.”

Speaking earlier, SFA chairman Dr Aidan O’Boyle said: “The title of this year’s conference is Beyond the Crisis and small business owner-managers have come to listen to experts and Irish entrepreneurs on how best to do this.

“The very enlightened business owners adapt and change all the time. However, whatever any individual business-owner can do within their own business will be worthless if the Government does not reinvent itself too. Government must act now to create the economic conditions conducive to small business growth and expansion.”

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