Syndicated News

IBEC cuts economic outlook on poor European trading conditions

IBEC has said it sees overall economic output or GDP of just 0.8% this year, down from its previous forecast of 1%.

But that is still a slightly better outturn than the one that is factored into the Department of Finance numbers of 0.7%.

The employers group has also cut its outlook for next year to 1.8% from 2.3%.

”Strong growth remains elusive”, IBEC stated in its latest quarterly economic outlook.

IBEC has cited poor trading conditions around Europe as the reason for cutting its growth forecasts.

Those weaker conditions will reduce the demand for Irish exports which had been growing strongly.

It also highlighted heightened consumer worries at home.

The group warned that in the face of tough trading conditions and depressed economic demand, some Government proposals were at odds with its efforts to create jobs.

It said that any move to introduce a statutory sick pay scheme or increased PRSI payments would cost thousands of jobs and ”would fly in the face of the Government’s stated position to make Ireland the best small country in the world in which to do business”.

It noted that best practice internationally is to reduce taxes on employment in tough times to get people back to work.

On Budget 2013, IBEC urged the Government to focus on supporting activity in the domestic market. It predicted that consumer spending will drop by another 2% this year and warned that domestic demand ”remains fragile”.

”Austerity alone is not the answer, we need Government to deliver the conditions for economic growth. We need an ambitious growth strategy that supports investment, addresses the weakness in the domestic economy and rebuilds confidence,” stated IBEC chief economist Fergal O’Brien.

< Back to Syndicated News