Bloomberg News

Ireland’s Economic Growth Rate to Halve in 2012, ESRI Says

November 29, 2011

Nov. 30 (Bloomberg) -- Ireland’s economic growth rate will more than halve next year as exports slow amid a deepening euro- region debt crisis, the Economic & Social Research Institute said.

Gross domestic product, the broadest measure of the economy, will rise 2.2 percent this year and 0.9 percent in 2012, the Dublin-based institute said today. The ESRI in September forecast growth of 1.8 percent this year and 2.3 percent in 2012.

“There has been a significant deterioration in the outlook for the world economy in recent months stemming from the uncertainty about the euro zone debt crisis,” the ESRI said.

Export growth will slow to 4.7 percent in 2012 from 6 percent this year, the ESRI said. Prime Minister Enda Kenny’s government is relying on overseas sales to counter falling consumer spending, as taxes rises and house prices plunge.

Household disposable income, which has fallen about 10 percent between 2008 and 2010, could drop by about 7 percent in the years through 2015, the ESRI said. That’s about 7,000 euros ($9,333) per household.

House prices will decline about 10 percent this year and about 7 percent next year, according to the ESRI. Gross national product, which excludes profits repatriated overseas, will shrink by 0.3 percent next year after expanding 1.2 percent this year, the ESRI said.

--Editors: Dara Doyle, Patrick Henry

To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net

To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net


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