Let me highlight the following angle on considering latest Irish economic forecasts. The downgrade by IMF, OECD and EU Comm, plus ESRI to 2012 growth of 0.9-1.0% - as much as I personally think these forecasts to be optimistic as they are - cuts across the strikingly more optimistic Department of Finance forecasts for 1.3% growth (in the Budget) or 1.6% growth (in the documents released one day ahead of the Budget). This is pretty clear.
But the real issue here is that in the long term, IMF projects Irish growth of 2.3%, 2.7% and 3.0% in 2013-2015, with the output gap of 3.6%, 2.2% and 1.1%. The implied loss to the Irish economy due to the crisis, from 2010 through 2015 is a cumulative €37.5bn. In other words, our economy's long-term growth potential for growth, held back by the structural recession and debt overhang, plus fiscal mess, is - between 2010-2015 - €37 billion higher than the expected realized income. Or 20.9% of the expected 2015 GDP.
While differences year on year are significant in terms of fiscal targets, the fact that in 6 years between 2010 and 2015 Ireland's economy will be forced (by our inept Government policies on debt and banks, plus our inept EU 'partners' policies on 'bailout' and banks) to waste almost 21% of our expected annual income shows the following:
But the real issue here is that in the long term, IMF projects Irish growth of 2.3%, 2.7% and 3.0% in 2013-2015, with the output gap of 3.6%, 2.2% and 1.1%. The implied loss to the Irish economy due to the crisis, from 2010 through 2015 is a cumulative €37.5bn. In other words, our economy's long-term growth potential for growth, held back by the structural recession and debt overhang, plus fiscal mess, is - between 2010-2015 - €37 billion higher than the expected realized income. Or 20.9% of the expected 2015 GDP.
While differences year on year are significant in terms of fiscal targets, the fact that in 6 years between 2010 and 2015 Ireland's economy will be forced (by our inept Government policies on debt and banks, plus our inept EU 'partners' policies on 'bailout' and banks) to waste almost 21% of our expected annual income shows the following:
- Current policies are incapable to drive Ireland back to its potential long term growth rates, and
- Ireland is clearly distinct from other peripheral countries which, while having a similar crisis, do not have the same potential for future growth as Ireland.
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