The Governor of the Central Bank said today that the outlook for the Irish economy is good, despite fears of a recession in the US.
John Hurley did warn however that unemployment rates will increase this year, with the construction industry particularly hard hit.
Although the proportion out of work will remain low by European averages, some will feel the effect of the difficult international economic climate, Hurley told the Oireachtas Committee on Finance.
Banks have been forced to submit weekly reports on their finances with financial turbulence continuing and steps have been taken to tighten lending criteria for risky home buyers, he told the joint committee of senators and deputies.
“Unemployment is low overall at 4.6%, but we would see that increasing in the course of this year but it will still be a moderate increase,” he warned.
“We will still be in a strong comparative situation vis a vis other countries.”
The market here has taken consistent hits over the past few weeks due to a financial crisis in the US.
Hurley said this was inevitable, but that Irish banks still managed to weather the storm.
He said that although risks to our economy are increasing, lessons can be learned to avoid a repeat of recent weeks.
He said the Central Bank is working closely with its European counterparts and the Financial Regulator during the ongoing financial instability.