Economic prospects - Guarded optimism

The guarded optimism expressed by the governor of the Central Bank, Patrick Honohan, when he spoke to an Oireachtas committee yesterday, carries some weight.

Prof Honohan is far enough removed from the politics of the past, and his almost unique record of calling a spade a spade suggests that accepting his prognosis might not be overly reckless.

He suggested that private sector growth might be strong enough to support an overall growth in employment this year.

He reiterated, though, that the Central Bank was concerned at the rate at which the banks are overhauling their loan recovery operations and resolving issues around problem loans. He suggested that there are approximately 100,000 cases of people in difficulty with debt that may never be repaid.

Resolving this issue will require imagination, empathy and considerable patience, but it must be done soon.