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A Glimpse Of Irelands Future

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From the Sunday Independent:

Experts rubbish boom forecast


SOME of the country's leading economists have described as "simply ludicrous" predictions that Ireland's economic miracle can continue with no fear of even a slight downturn.

NCB Stockbrokers declared that one in five Irish will be an immigrant in 2020, house prices will keep accelerating and the number of cars on our roads will have doubled, while the economy will grow by 5 per cent every year.

But Jim Power, chief economist at Friends First, says the report is so totally off the mark that it is simply impossible. "This makes me question my understanding of economics. If it is correct I would have to get out of the business."

What worries Power and others are the assumptions in the report, particularly that a very high level of immigration is unquestionably good. According to Power, if the population does grow to over five million in the next 15 years it will not mean more wealth per head, but a smaller slice of the cake for everyone.

"We simply cannot sustain growth without a significant multinational manufacturing sector. The quality of many of our new jobs have been downgraded and attract lower wages than in the past, leading to lower productivity.

"We are also way over-dependent on housing which means the level of debt is growing so much so that even middle-income earners are reportedly having to cut back on food and heating to keep within their means.

"Our infrastructure is creaking with four million people and would probably simply grind to halt with five million people trying to drive three million cars around the roads."

Some argue that the Government needs to try and consolidate the growth we have, take back all property incentives and ensure an even path for growth.

The risk is that chasing after the type of growth NCB is predicting would risk totally overheating the economy and increase the likelihood of a crash.

The NCB economists say house prices will continue growing at up to 8 per cent a year every year for the next 15.

So far this year the average price of a house has jumped by €6,000, while the annual rate of increase to the end of February was 11.1 per cent, well above what the Central Bank and many others believe is sustainable.

Power also argues that the Government needs to be turning its attention to consolidation. "The Government is mis-allocating our resources. They should be going to ensure top class public services and physical and IT infrastructure, but instead are subsidising builders and developers.

"If you believed that the Government is capable of delivering a first world health and education system as well as world-class physical and IT infrastructure there might be some hope that the economy would break all the rules."

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Also from the Sindo

How many economists can fit on one TV?

EVERYONE is desperate for their 15 minutes of fame and we're resorting to extreme measures to achieve it.

One lot is learning how to dance a jig on telly while every Z-list celeb is queueing up to be grievously insulted by two puppets on the Podge and Rodge Show. But forget about Celebrity Jigs 'n' Reels and trips to Ballydung, the only way to achieve celeb status in our wealth-obsessed society is to become an economist.

Economists get more airtime than even Michael McDowell gets when he forgets to take his blood pressure tablets. We just can't get enough of these bespectacled number crunchers talking about sustained growth statistics.

Economania has reached such feverish levels that last week two economic reports were rushed out on the same day by rival firms, Friends First and NCB stockbrokers. As a result, there were so many economists packed into the RTE newsroom that it resembled the floor of Wall Street during heavy trading.

We're even developing different types of economists to cope with consumer demand. For lovers of the unstructured look, there's the beardy bloke with glasses type epitomised by Dermot O'Brien of NCB, while on the other hand, there's the clean-cut, earnest ones like George Lee for the mammies.

Friends First clean-cut economist Jim Power's report said we're too obsessed with housing but the economy is still growing rapidly, while NCB's rugged Dermot O'Brien forecast that our population will grow by 30 per cent to over 5.3 million citizens by the year 2020.

Forget about the economy, it's the profile of the economists that's experiencing the most growth. Don't be surprised if economic forecasts replace the weather forecast after the news soon.

Will Hanafin

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Only in Ireland would stockbrokers be talking up an alternative investment class.

Jim Power seems to have changed his tune of late, I wonder why? Is he afraid of the lynch mobs that will be hunting down all these crazy debt boosters in the years to come? :P

Ireland is nearly off the radar as far as manufacturing is concerned. My guess is that we will be very fortunate as an economy if we can retain our present population, (indigenous and foreign) over the next decade.

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Yeah, the company I was working for a few years ago used to do all its manufacturing in Ireland, but moved it to China some time back because Ireland became too expensive. I'm sure the insane rise in house prices can't have made it any cheaper since...

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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