In an economic outlook attached to this week’s budget, the Department of Finance projected that unemployment would reach 12.6% this year and 15.5% in 2010.
The latter figure means 340,000 people will be out of work next year, the department said.
This is double the number in the last quarter of 2008 when, according to the Central Statistics Office (CSO), 170,700 were unemployed.
The CSO measures unemployment through its Quarterly National Household Survey, on which the department’s projections are based.
The survey, which is regarded as the official measure of unemployment, counts only those who have no work at all.
This is in contrast to another CSO measurement, the Live Register, which counts all those claiming unemployment payments — including part-time and seasonal workers who are entitled to reduced benefits. As a result, the Live Register is always higher than the quarterly survey.
At last count in March, there were 372,800 on the Live Register, an increase of 20,000 on the previous month.
In the outlook, the department said the Live Register was projected to “average” about 440,000 this year — meaning the figure could be higher in certain months.
Many economists believe it will break through the 500,000 mark at some point.
The department said the labour market had “weakened substantially” over the course of 2008 and got even worse since.
“Falling employment in the labour-intensive construction sector was the initial cause of weakness, but by the final quarter, employment was on a downward path in almost all parts of the private sector,” the outlook says.
“However, since then the pace of deterioration in the labour market has accelerated. For instance, while not designed to measure unemployment, the number on the Live Register rose at an exceptionally fast pace in the first three months of this year. While the rate of increase in March showed some tentative signs of easing, the number on the Live Register is projected to average around 440,000 this year on the basis of current trends.”
The department believes that matters will improve on the labour market front after 2010, with the unemployment rate projected to fall to 11.8% between 2011 and 2013.
But it warns that while the projections represent a “credible scenario”, the uncertainties in economic forecasting are “heightened to a considerable degree” in the current environment.
A steeper or more prolonged downturn amongst Ireland’s trading partners, or the possibility that the global financial market problems persist for longer than expected, would all impact on the projections, it said.