THE Central Bank has said the economy should grow marginally this year before picking up pace next year, but warned a decline in the unemployment rate is unlikely in 2010.
As part of its latest quarterly bulletin, the Central Bank said it sees GDP growing by 0.8% this year and by as much as 2.8% in 2011. The economy in GDP terms declined by nearly 8% last year.
“The indications are that the economy evolved broadly as expected through the first half of the year. The performance of the exporting sector strengthened, largely due to a good performance by the multinational sector,” the bank’s bulletin said.
When it comes to forecasting economic growth in GNP terms – which excludes profitable contribution from the multinational sector – the bank’s numbers are slightly different. GNP was down by just under 11% in 2009 and the Central Bank is forecasting a further dip of 1%, before growth of 2.2% next year.
More depressing is the outlook on jobs, with the Central Bank saying that further drops in the number of those in work are likely this year.
In total, it suggests that last year’s 8.1% drop in employment numbers will be followed by a nearly 4% drop this year – resulting in a rise in the unemployment rate from 11.8% to 13.5% by the end of the year. Any marginal improvement is unlikely to be seen until next year, when the unemployment rate is expected to inch downwards to about 13.3%.
“Reflecting both the relative weakness of domestic demand and the general pattern that employment lags output developments, employment has continued to fall, although at a diminishing rate. In fact, employment growth is unlikely to fully stabilise before the end of the year and downward pressure on unemployment from this source will likely only gradually emerge through next year,” yesterday’s report suggested.
The Central Bank issued its first ever quarterly financial accounts yesterday, showing Irish household net financial wealth levels grew 58% to €95.8bn.
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