GDP Growth to be 50% less than target

According to an article by Ann Cahill in today's Irish Examiner GDP is to be lower than forecast. The European Commission has forecast that Ireland's GDP growth will be about 50% lower next year than the Government had predicted when drawing up the four year budget plan

One of the reasons for the decline in the expected GDP is due to the reduction in consumption, which is mainly due to lower income. The Government had forecast growth to be 1.75% however the European Comission has reduced this forecast to 0.9% growth.

Consequently, the state budget deficit will now not be reduced to 3% until 2015 rather than the taget year of 2014. According to the article the IMF, European Comission and ECB also believe 2015 is a better target.

However, the deficit could take longer to decrease if banks need more funding and depending on unemployment.

http://www.irishexaminer.com/business/gdp-growth-to-miss-target-by-half-ec-forecasts-137965.html