Despite being branded alongside the so called ‘PIIGS’ group (Portugal, Ireland, Italy, Greece Spain), the Ernst & Young’s Economic Eye Summer Forecast Report says that Ireland’s economy is to grow by 2.8% in 2011.
Currently Ireland is bottom of the Eurozone league in terms of the size of its financial deficit and grouped with Portugal, Italy, Greece Spain as not economically sound, however the Ernst & Young’s Economic report shows confidence in Ireland’s ability to recover stating that “Ireland is no Greece”. It is thought that Ireland’s prospects of recovery are more favourable than other EU countries due to… its key economic competitiveness advantages i.e. “it is top for graduate skills in the 25-34 age group, has the fastest rate of price correction boosting cost competitiveness, and is second in export orientation at 87%.”
The Economic Report comes just after the Wall Street Journal published an editorial earlier in the week entitled “The Irish Example” which praised our Government for quickly introducing budget cuts to address the recession. It said Ireland’s quick action should be a model for Spain, Portugal, Italy and Greece. The editorial suggested Ireland’s increasing competitiveness on cost may mean the economy recovers quicker than expected.
However before we get too excited things are to get a small bit worse before they get better i.e. the report also highlighted that our economy is expected to contract by a further 1% in GDP in 2010 before it gets on the full road to recovery.