ESRI: Unemployment will remain high next year

A quarterly economic commentary from the Economic and Social Research Institute (ESRI) said the figures were high considering gross domestic product (GDP), which measures the value of all companies, including foreign multinationals, is expected to rise 2.2% by 2013.

ESRI research officer David Duffy said the projected growth in Ireland and the eurozone as a whole is not enough to tackle the unemployment crisis.

"Given the size of the unemployment rate, the growth predicted isn't sufficiently strong enough to bring about a reduction in unemployment," said Mr Duffy.

"Much of the growth will be driven by the export side of the economy."

The report estimates that the Irish economy will grow this year by 0.6% in GDP terms, but will remain unchanged when measured by gross national product.

Mr Duffy pointed out its 0.6% growth prediction is slightly weaker than initially anticipated when the organisation forecast a 0.9% increase back in February.

"It's along the lines of steady as she goes," said Mr Duffy.

"We now expect growth of 0.6%, which is essentially a little weaker."

He said the European backdrop is "very important" in addressing the jobs issue on a domestic level.

"We continue to be of the view that the most important thing going forward is what happens internationally," he went on.

"A lot of what is needed for the economy is taking place, but what we really need is growth being generated from a growing European community.

"Part of that comes from investment, but mainly it's about activity over all that stimulates economies and generates demand."

The report claimed that fiscal stimulus in Europe is essential to overcome the current "stagnation" in Ireland.

Mr Duffy explained that a domestic stimulus plan would not lead to sustained growth because in an open economy such as Ireland, most of the impact feeds into imports.

He said for an economy to thrive, stimulus should be pumped into competitive gains and export growth