They are also forecasting GNP to fall -6.3% in 09 and -2.8% in 2010;
Employment to fall 6% (circa 120k) this year and 5% (circa 100k) in 2010;
Retail sales to fall -7% this and -5% in 2010.
I heard their economist on News at One predicting just 15k housing starts in 2010. Thats only maybe 5 or 6k private housing starts on top of anticipated social housing allocation.
We’ve managed to go from superficial boom to one hell of a bust.
In time I’m sure economists/academics/journalists/researchers will be able to offer learned analysis as to where it all went wrong.
In the meantime my considered opinion is that Bertie Ahern is the architect of this so called country’s downfall.
He was chauffered around the country to attend the opening of every envelope and acted the part of the bloke next door to Oscar winning standards. All this while he squandered Ireland’s new found wealth causing pain for generations to come.
Worst was his influence on Irish society, the short view, the brown envelope, the “be grand” attitude, the lack of morals, the lack of any paper trail, the idea that growth, regardless of origin was acceptable.
I know he will go to his grave with no idea of the damage he has caused, nor in fact thenotion that he had anything to do with it.
To be honest, most of this is not a bust. Most of this is a hard rebalancing of the economy - the removal of some 18% of the economy (excess construction) is going to hurt. Despite attempts by the government to use the NDP to prop this up, it (the NDP) has been part of the problem. It is not clear to me that it is part of the solution.
It also seems to be that the Davy’s figures are hopelessly optimistic, in part because they have made some wild assumptions about government spending. To avoid having to shrink their GDP/GNP figures further, Davy’s are assuming that the deficit will be 12% of GDP in 2009 and will increase to 13% of GDP in 2010. Some of us on the 'pin already believe that the taxation undershoot will amount to some 4% of GDP in addition to the existing deficit. This will affect 2009 and 2010 as the causes of the undershoot (lower employment, earnings and spending in the private sector) will remain the same in 2010, IMO.
As far as I can see, the NTMA is just about tapped out as regards further recapitalisation of the banks, so further borrowing will be required next year, assuming the banks can survive this year without more money. From what I can see, no account is taken of the likely shrinkage of GDP as a result of the banking crisis, even though it is mentioned. Taking about considerable variation in the effects of banking crises is obfustication. The bigger the run up in the property bubble, the bigger the bust and the greater the effect. Macro conditions have helped following the crisis for growth to recover, but it doesn’t take away from the immediate effects of the bust.
the fact that they have the sheer temerity to forecast ANY figure for 2010 when nobody has a clue where this whole thing is going (not to mention how completely off base they’ve been in the past, plus their now seemingly monthly revisions) just goes to show how stupid these forecasts really are. if they had any humility at all they’d hold their hands up and say “yep, eh, we actually haven’t a clue lads whats gonna happen”.
A new report from Goodbody Stockbrokers has forecast that the Irish economy will shrink by 6% this year. Goodbody’s economic forecast compares with the 4% falls for this year recently predicted by the Government and the Central Bank. They also go on to say house prices will fall “AT LEAST” 40% from there peak.
Based on the above let’s take a house originally priced at €890,000 now reduced to €650,000, based on the Goodbody Stockbrokers forecast this house should be valued at €365,000
