The economy appears to be moving in the right direction
Its been three months since since the IMF came to Ireland and the gloomy mood still persists. However when the ESRI set out their new quarterly economic forecasts on Wednesday there was more positivity. Despite the imposition of a much larger budgetary adjustment for 2011 than feared in October – of €6 billion, rather than a mere €4 billion, there is no grave talk. The first forecasts for 2012 include an acceleration in economic growth and the first increase in the number of people at work in five years. The prospect of price stability should also give cause for relief. The ESRI expects Irish inflation to remain very low in 2011-12, with prices rising in a range of 1 – 2 per cent annually. This follows an unprecedented two consecutive years of falling consumer prices. On of the reason for this is the expected fall in wages. This should improve Irish competitiveness. Exports could be even stronger than predicted, sucking more foreign cash into the country. Although the Irish economy is far from recovered there are signs we are moving in the right direction