Davy: Recession to end after Christmas
The recession will end in the first quarter of next year, according to Davy Research's chief economist Rossa White.
"The Irish economy is set to return to growth in Q1 2010," said the new report. "We expect average annual growth of 0.5% in real GNP in 2010, but that conceals gradual acceleration in economic activity intra-year. It implies a peak-to-trough decline in GNP of 14% from Q3 2007-Q4 2009.
The report points to a broad range of indicators, including survey data, retail sales, tax receipts and industrial production.
It is expected that the unemployment rate to peak below 14% in Q3 2010.
It also predicts that consumer spending may increase 1.5% as real incomes stabilise and precautionary saving eases, and export growth increases.
"We expect the volume of GNP to grow at an above-trend rate of 4% in 2011," said White.
"We assume that agriculture, industry and private services will expand. Construction output will shrink until 2011, while the amount of public services may decline slightly."
The new study cautions that it will not be a return to the "good times", however.
"It may not 'feel' like conditions are improving that quickly," said White.
"Domestic demand will lag growth in bottom-line GNP. In addition, unemployment will take time to fall: we expect the rate to eventually dip below 12% by end-2011.
"Equally, not every sector will be recovering: indigenous industry and construction will lag."
