The bad news is the real pain has yet to come

OVER the past few days the country has been pre-occupied with the two-act budget that will inflict significant pain on the economy over the coming year.

Taking €3.8 billion out of an economy struggling to get back on to its feet after a recession was always going to be a painful process that would inevitably draw the ire of every vested interest group affected. So it has turned out.

However, the bad news is that we can look forward to more of the same this time next year. In fact next year will be considerably more difficult. In December 2012 it is envisaged that the Government will seek to deliver savings of €3.6bn. Coming up with this sort of saving will be incredibly difficult and painful, given how much has been taken out of the economy over the past four years. In other words most of the low hanging fruit has been taken off the tree and it will be a much thornier issue to pick the fruit higher up in the tree.