🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Irish budget to stabilise but not cut deficit -ESRI

Published 10/13/2009, 03:30 AM
Updated 10/13/2009, 03:33 AM

* Budget deficit to stay above 12 pct/GDP in 2010 -ESRI

* Government debt to jump due to deficit, "bad bank"

* Growth to return in second half of 2010

DUBLIN, Oct 13 (Reuters) - Ireland's plans for savings worth 4 billion euros in the 2010 budget will stabilise the deficit, but it will still be more than four times above levels allowed by the EU, a government-funded research body said on Tuesday.

Analysts say the strain of pushing through the planned spending cuts could topple Prime Minister Brian Cowen's unpopular governing coalition this year, with trade unions already planning a series of protests against the measures.

Even if the austerity steps are enacted, the Economic and Social Research Institute said the deficit will reach 12.8 percent of gross domestic product next year, compared with the 12.9 percent forecast for 2009 and the European Union's limit of 3 percent.

Gross government debt will rise to 75.7 percent of GDP next year from just 25 percent in 2007 at the end of the "Celtic Tiger" boom, whose sudden crash has made Ireland one of the weakest links in the euro zone.

The National Asset Management Agency, Dublin's "bad bank" scheme to pay 54 billion euros for banks' risky commercial property loans, is set to increase debt by a further 33 percent of GDP to close to 110 percent, the ESRI said.

Ireland's net debt will rise by less due to the corresponding assets taken over from the banks.

The ESRI said it expected GDP to contract 7.2 percent in 2009 and by 1.1 percent in 2010.

"Underlying these annual forecasts is a quarterly profile in which we expect growth to return in the latter part of 2010, although at a very modest pace," it said. (Reporting by Andras Gergely; Editing by Leslie Adler)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.