PARIS (MNI) – The Central Bank of Ireland on Thursday cut its
growth forecast for the Irish economy to 0.5% from 1.8%, citing weaker
demand for exports.
The central bank said that growth should recover to 2.1% in 2013,
but added that uncertainty over the outlook remained high.
“A wide range of outcomes is possible, including one in which the
domestic economy is held back by weaker external demand for a longer
than expected time,” the central bank said in its quarterly report.
The impact of the Eurozone debt crisis has broadened beyond the
financial system to the wider economy, the Irish central bank said, and
slower growth was creating new concerns about public finances.
While the EU leaders and the European Central Bank have taken many
steps to combat the crisis, “it is clear that the cumulative impact of
all these actions is not yet sufficient to convincingly dispel
uncertainty about the ability of Europe to deal effectively with the
challenges posed by the crisis,” the central bank said.
Domestically, the fiscal tightening in the government’s 2012 budget
and Ireland’s lower-than-expected deficit in 2011, should allow the
country to meet its 8.6% deficit target for 2012, the Irish central bank
said.
Continued external weakness and its knock-on effect on domestic
growth could make the government’s 2012 target harder to reach, however,
the central bank said.
The Irish government is committed under its bailout program to cut
the deficit to less than 3% of GDP by 2015.
–Paris newsroom; +33144715540; jduffy@marketnews.com
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