Possibility of speed bumps on road to national recovery as rates set to rise, predicts Power

INTEREST rates are expected to begin rising again by the end of next year or early 2011, at the latest. However, Ireland is not likely to see GDP growth for another two years, according to one leading economist.

As part of his quarterly economic outlook presentation yesterday, Friends First chief economist Jim Power said that despite more upbeat outlooks from other commentators, he still expects the Irish economy to shrink by another 1.7% next year (on top of the anticipated 7.3% drop for 2009, as a whole) before modest growth of around 3% is seen in 2011.

The economist said that although there exists “clear evidence of recovery emerging in all international economies”, the recovery here is likely to be gradual “with the possibility of speed bumps.”