Ireland may see 2012 growth

Ireland is the only peripheral economy in the eurozone expected to see growth this year, and it could see consumer spending grow in 2013 for the first time since 2007, a Reuters poll showed yesterday.

Nine economists surveyed by Reuters expect GDP growth of 0.7%, a sharp drop from the 1.5% forecast in the previous poll in December.

Ireland’s official creditors at the EU, the IMF and the ECB expect GDP growth of 0.5% this year, a far cry from the near 2% expected when Ireland accepted a bailout in November 2010.

The country, held up as a role model for other struggling indebted nations, will barely have escaped falling back into recession in 2011 with economists forecasting quarterly GDP growth of just 0.05% in Q4.

Negative quarterly growth in October to December would mean Ireland had fallen back into a technical recession, defined as two consecutive quarters of negative growth. Q4 data will be released in March.

“Ireland’s success in so far meeting its fiscal goals has seen it held up as a role model for other debt-ridden states, but the eurozone debt crisis could throw Dublin off course if it means the currency bloc, an important trading partner, falls back into recession,” said Alan McQuaid, chief economist with Bloxham Stockbrokers in Dublin.

“With Europe in real danger of tipping back into recession, the Government may be forced to push through even harsher budgets in 2013 and beyond if Ireland’s trade-dependent economy fails to produce sufficient revenues to meet the country’s EU-IMF goals.”