Ernst and Young: Ireland to return to recession this year
A major accounting firm has today predicted that Ireland will fall back into recession this year.
In its latest Economic Eye report, Ernst and Young's revised its GDP forecast from 0.1% to -0.1%.
The outlook for the following years offers little improvement, with 0.6% growth predicted in 2013 and a 1.4% growth in GDP in 2014.
It is also predicting Ireland's unemployment level will hit 14.9% by the end of the year. In May, it stood at 14.7 %.
Economic Advisor with Ernst and Young, Neil Gibson, said that our emigration problem is keeping that figure lower than it might otherwise be.
"If we weren't emigrating in significant numbers, we might have an unemployment rate akin to what we have in places like Spain where it's well over 20%," he said.
"So although very high, actually the dynamic labour market, the fact that the Irish people have continued to seek out opportunities wherever they might be in the globe have actually kept unemployment lower than it might otherwise have been."
Mike McKerr, managing partner at Ernst & Young Ireland said: “Consumers across the Island continue to suffer from a decline in real income and this is affecting domestic businesses. Only when consumer spending, supported by a recovery in Government and investment spending, begins to grow alongside exports will we see a stronger, sustainable recovery with employment growth.
“This underpins the importance of a strong domestic economy to compliment our international business base.”
