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Government forecasts much lower growth, a larger budget deficit and higher unemployment 2012

The Government has revised its macroeconomic and fiscal projections. The updated Stability and Growth Programme (published April 29, 2011) forecasts growth in GDP (gross domestic product) to be 0.75% compared to the forecast published with the Budget last December.

It reduces the growth forecast for 2012 to 2.5% from 3.25% forecast at Budget time. Government is also projecting a budget deficit of 10.0% compared to a 9.4% rate forecast less than five months ago. Unemployment is projected to rise to 14.5%. These forecasts mean that the outlook now is far bleaker than that which underpinned the IMF/ECBV/EU Bailout.

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