Government growth forecast reduced by half for 2012

The Government has reduced its growth forecast for 2012 from 1.3% to 0.7% and for 2013 from 2.4% to 2.2%. The revised forecasts were outlined in the Stability Programme Update – April 2012. The Government is forecasting an export-led recovery with domestic demand not expected to contribute to growth until at least 2014. However the update also revises down GDP projections for Ireland’s key trading partners for exports to just 0.5% for the coming year.   

Some of the key points in the report are:
·         A fall of 2.5% in investment is forecast for 2012
·         The contraction in private consumptions is set to be ½ a percentage point higher than previously projected.
·         Employment fell by 2.1% in 2011 and is expected to fall by 0.4% in 2012.
·         A slight fall in unemployment to 14.3% is projected – this will be due to continued outward migration and a fall in labour force participation.
Social Justice Ireland believes that the Government’s current approach to tackling our problems is running down the economy. By refusing to develop an investment programme of scale there will be no substantial impact on unemployment as is borne out by the Government’s own projections in the Stability Update. 
Ireland is facing a lengthy period of low-growth, high debt, increasing poverty, high unemployment and growing inequality. At the same time the austerity drive to balance the nation’s books is creating a society with deep social injustices, not least for young people who have no sustainable jobs and no future in Ireland. 
To read the Stability Programme Update click here.