‘Ireland may be back in recession’

IRELAND is expected to have fallen back into recession in the second half of this year.

This is according to the latest Ernst & Young &economic eye which forecast that pre-recessionemployment levels will not be reached until 2030.

It said Ireland’s unemployment rate will continue to rise to 14.6% in 2012, the highest annual average unemployment rate since 1993, although they do predict that unemployment levels will begin to fall from 2013 (14%).

They said job opportunities created in the next decade will not all necessarily align to the skills of those currently out of work, leaving an employability challenge that is likely to last a generation.

&Ernst & Young revised down its economic growth forecast for Ireland in 2012 from 1.1% in May, to just 0.5%.

Economic advisor to &the company, Neil Gibson said: “The Republic of Ireland’s economy is forecast to grow in 2011 on an annual basis. This has provided much needed welcome cheer to the Government, investors, the IMF and EU in an otherwise still very troubling economic environment.

“However, the domestic economy and employment continue to decline and our latest forecast has also downgraded growth prospects in key export markets.

“Given the extent to which the Republic of Ireland currently relies on rising global exports to drive economic growth, this is bound to impact overall economic performance in 2012.”

Ernst & Young& said the domestic economy is still contracting, the GNP growth forecast for 2011 is weaker and the forecast warns that the surprisingly strong performance in the first half of the year does not signal that continued strong growth can be expected for the second half of 2011.

The accountancy firm has upgraded its latest economic growth forecast for Ireland when taking into account revenues from foreign companies predicting growth in GDP of 1.2% this year.

However the forecast for GDP growth in 2012 has been downgraded to 0.5%.

Ireland saw quarter one and two GDP growth rates of 1.9% and 1.6% in 2011, the first consecutive quarters of positive GDP growth since 2006.

“The Republic of Ireland’s trade with global markets has been its saving grace — without it, the economic decline would have led to a sustained economic depression with declines of over 10% per annum.

“Indeed, it is the size, scale and diversity of the Republic’s export market that will continue to distinguish the country from the likes of Portugal, Greece and Spain,” said Mr Gibson.