Economist warns against 'self-fulfilling prophecy'
Doom merchants predicting the demise of the Irish economy may be self-fulfilling their gloomy outlook, a top economist warned today.
Jim Power, chief economist with one of the country's leading financial services companies, insisted extreme negativity about the future should be thwarted.
But a senior academic who has suggested house prices could plummet by up to 30% in the coming years was adamant that people canot be censored.
Friends First expert Mr Power said the pessimism had reached dangerous levels posing a potential threat to jobs and prosperity.
"There is currently an inordinate amount of negativity permeating Irish economic debate," he told the inaugural Heineken Ireland Open Forum in Cork.
"This is dangerous and could have the effect of undermining confidence and ultimately real economic activity and jobs."
Mr Power branded the economic naysayers "merchants of doom" who are risking the country's future prospects.
"The perpetrators of the extreme negativity should question their real motives and ask themselves if their comments are doing more harm than good," he said.
"The effect of more considered, balanced, albeit critical commentary would be to force policy makers to focus on the policy issues that need to be addressed in order to avoid the more pessimistic outcomes".
But Alan Ahearne, economics lecturer at NUI Galway, suggested the remarks were akin to an attack on democracy.
"That would seem to suggest that the only people who can talk about the property market are people that have something positive to say about it," he said.
"That doesn't make sense to me. Serious analysts should be free to talk about what they believe. We can't just hear one side of the story."
The economic analyst courted controversy when he predicted up to 30% could be wiped off house prices in the event of "hard landing" on the recent television programme 'Future Shock: Property Crash'.
"It's in everyone's interest that there is a soft landing but you can't have people being censored," he said.
Separately, research published today confirmed Ireland's international competitiveness has deteriorated since 2000 because of price hikes and the rise in the value of the euro.
However the employment rate rose from 56.1% in 1997 to 68.1% last year, according to Central Statistics Office's Measuring Ireland's Progress report.
It also revealed that more than 6% of men and 7.5% of women in Ireland were in consistent poverty in 2005 while a fifth of the population were at risk of poverty that year.
The latter figure was one of the highest among the 27 member states of the European Union.
