OECD publishes its Economic Outlook and a forecast for Ireland

The OECD published its Economic Outlook #89 on May 25, 2011. Material made available on the web may be accessed here.

On the same day the OECD published an economic forecast summary for Ireland.The Summary can be downloaded below .

Ireland is continuing to undertake a comprehensive and vital adjustment programme to reduce its

macroeconomic imbalances and restore its banking system to health. Despite robust export growth,

weak domestic demand and ongoing fiscal consolidation have prevented an economic recovery from

unfolding so far. As domestic demand stabilises, a modest upturn of output is expected in the course of

2011, with some acceleration in 2012. The unemployment rate is likely to stay high, and core deflation

to continue.

The fiscal position remains characterised by high deficits, reflecting negative cyclical effects, the

collapse of housing-related tax revenues and the large cost of bank recapitalisation. In line with the EU

and IMF programme, the general government deficit needs to be reduced to below 3% of GDP by 2015,

in order to arrest the accumulation of public debt and restore fiscal sustainability. The government

plans to cover the recapitalisation needs of the banking system revealed by the recent stress tests so

as to restore normal bank credit flows and support the economic recovery. This should be done as

planned without delay. Improving competitiveness through wage restraint and structural reforms

should remain a priority.