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Irish Economy: Central Bank Cuts 2008 Gdp Growth Forecast To 0.6%

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Last March, the Central Bank was projecting a growth rate of 1.9 per cent in 2008 and 3.2 per cent in 2009.


Although labour force growth is set to ease back also, reflecting a weaker trend in participation and a drop off in inward migration, the unemployment rate is nevertheless set to increase significantly to an average of 5.9 per cent this year and 6.8 per cent next year.


New house completions are forecast to fall from 78,000 in 2007 to 45,000 this year with a further decline to 35,000 units in 2009. As a result, the volume of building and construction investment is forecast to fall by 17.4 per cent this year and by a further 6.1 per cent in 2009.

Banks also exposed to property

At the end of June, 60pc of its [AIB] loan book was property-related.

While this might seem to be on the high side, it compares favourably with 71pc at Bank of Ireland, 90pc at Permanent TSB and virtually 100pc at Anglo Irish.


Will Ireland have a Japanese style bust ?

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This demonstrates the fallacy of running an economy on building things you don't need to sell to investors in bottles labelled "snake oil".

Housing shortage?

Might as well employed them to dig holes and fill them in again.

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The reaction of the Irish central bank and Government can best be described as rabbits caught in the headlights. Economic forecasts from either should be dismissed at this time. If you want to get an honest opinion of where Ireland is heading take a look at the ISEQ index of Irish shares, which is essentially and index of banks and construction companies.


Currently the developers are not generating enough cash flow and the banks are afraid to move on the major developers because they know they will have to realise major losses, it is this same factor that bought down the Japanese banks. It's explained how this happened in the linked PDF.


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  • 401 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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