Central Bank forecast for economic growth much lower than Government announced in Budget 2011

The latest Central Bank Quarterly Bulletin has produced growth predictions that are substantially lower than those contained in the Government’s Budget. This brings the Government’s other predictions into serious question. Readers will recall that Social Justice Ireland predicted this would be the case when the Budget was published.

The Central Bank is now predicting that in 2011, GDP growth will be in the region of 1 per cent, rising to around 2.3 per cent in 2012. The Government's predictions on which it based its Budget were 1.7% and 3.2%.

According to the Central Bank, GNP is expected to be broadly unchanged this year, with a return to positive growth, in the region of 1.5 per cent, projected for 2012. The Government's comparable predictions are 1.0% and 2.6%.

These projections represent a significant downward revision to those published by the Central Bank in the last Quarterly Bulletin, which were compiled on the basis of a much smaller €3 billion fiscal consolidation in 2011 than the one currently budgeted, and on the basis of continued market access to funding on reasonable terms.

Social Justice Ireland continues to believe that the EU/IMF Bailout should be renegotiated to ensure the time-scale is lengthened, the cost reduced and job-creation promoted. Otherwise the targets contained in the Bailout will not be met and the recovery will be long-delayed.