The Government has received a boost from the latest Economic Social and Research Institute (ESRI) report which could result in next year’s budget adjustment being less than the planned €2bn.
In its most upbeat assessment of the economy in five years, the ESRI report predicts growth levels above government forecasts and says that contrary to public perception there has not been a so-called brain drain during the five-year economic crisis as most of the job losses hit the less well educated.
The ESRI forecasts both GDP and GNP growth to reach 2.7% over 2014, which is much more optimistic than the Government’s own growth forecast of 2%.
The welcome news came as the Coalition released a post-bailout economic plan which was criticised by opposition parties for being long on aspiration and short on detail.
The much more bullish outlook from the ESRI is based on a pick-up in the domestic economy, combined with a continuing stimulus from exports as well as much more robust employment growth than previously forecast.
If the ESRI’s growth projections are accurate, then the Government will be able to introduce budget cuts of less than the €2bn planned for next October in order to meet the deficit target.
The ESRI’s analysis of the jobs market found that instead of a brain drain during the downturn, there has been a net increase in graduate positions during the crisis. Most of the job losses occurred among the less well educated.
The think-tank found that there has been a broad-based recovery in the jobs market.
There were 10 sectors showing employment growth across all regions of the country, except the Mid-east.
“While emigration could be the cause for many of the other regions’ reductions, it is likely the large decreases are employment-related in Dublin, the West, and South-West,” it said.
Yesterday the Government published its economic plan entitled A Strategy for Growth which aims to have a balanced budget by 2018 but it was attacked for not having enough specifics.
Launching the report, Taoiseach Enda Kenny said he hoped for a return to full employment by the end of the decade.
“By 2020, we aim to replace all of the 330,000 jobs that were lost during the economic crisis between 2008 and 2011 with new jobs, and in doing so, more than halve the rate of unemployment,” said Mr Kenny.
However the report was described as a “lost opportunity” by Fianna Fáil’s Michael McGrath, who accused the Coalition of gambling Ireland’s recovery on economic growth without any clear plan on how to achieve it.
Sinn Féin’s Pearse Doherty also described the plan as very hollow, empty, and lacking in specifics.
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