I should remind readers that the Economist Intelligence Unit in November 2007 said the following:
* Despite an estimated increase in the euro area inflation rate to 2.6% in October, the European Central Bank (ECB) is not expected to increase interest rates above the current rate of 4%.
* The fiscal position is deteriorating, and this will place constraints on government expenditure. A deficit is expected by 2009.
* GDP growth is expected to slow sharply in 2008, mainly because of the ongoing slowdown in the previously overheated property sector. However, there is a real risk of recession.
* Unemployment is expected to rise over the outlook period, as the construction sector shrinks, but inflation and the current-account deficit will both fall.
I blogged about it back then as Ahern had recently said people who talk down the economy might as well kill themselves. Well, I guess those naysayers were correct. And Ahern was simply ignoring the problem. His successor has also ignored the problem. Now we have to deal with what the EIU forecast.
Anyone who has been watching sites like Treesdontgrowtothesky, DaftWatch or Irish Property Watch will see that the property market is in very serious doo-doo. And it is getting progressively worse. The number of houses coming on the market is rising, and the number of buyers out there is falling as a result of a return to normal lending conditions (yes we were living in a credit bubble for some time).
So what does all this mean for Ireland?
It’s the big R. And it will be with us for a while.
Update: The ESRI press release is available here.
Comments
8 responses to “Recession in Ireland”
[…] recession. Tomorrow we are going to be hearing a lot about it thanks to the ESRI quarterly report and […]
And it’s already been here a while. It’s just that everybody has been in denial.
Too true. Just as people are still in denial about the value of their properties. Once reality sinks in there will be blood on the streets.
i am hoping that the global economy would recover from this economic recession. life has been very hard with these massive job cuts.
i can see some improvement in US economy. i just hope that we will be out of this economic recession soon.
during the height of the economic recession, our online and offline business in the US have suffered some major drop in sales. now our sales are getting slowly back to normal.
Ireland Recession will not be over for another 5 yrs. The Government is killing his country. hey have no idea on how to safe the country. All they do is take and take.. Trying to get as much money as possible from the taxpayers. Sooner or later, this country will have no more taxpayers to pays taxes and everyone will be on social benefits. I think everyone need to prays. And hopes God can create a miricle for us..
the mind boggles!!!!…our (idiot) leader obviously has completely lost touch with the common people…..he lives in a little cocoon of comfort and has no idea what it is like to worry about bills…..the people who have robbed this country blind were given a golden had shake and the ones who were’nt continue to earn exorbitant amounts!!! he said today that it is vital we stick to the 2014 deadline as we do not want europe in control of our economy – well i’m sorry but would that really be such a bad thing for us the people after all the ones we put into office over the decades have done nothing but rob this country blind, lining their own pockets with their shady deals and made us bankrupt in the first place!!!!! it might not suit the corrupt in charge as they would for once be accountable…..