"Ireland will beat recession", "Rapid growth... as early as next year" - Cowen

[Shambo]

There is a huge difference between economic growth, and returning to the position we were at. Even if we lost 50,000 jobs a month until September 2010, and then had one extra job a month for October, November and December, Cowen can still say we had job growth in 2010 (3 new jobs in the 4th Quarter).

Why should it take us more than 15 months to reach the bottom?

In my humble opinion things will only turn around when the cost of doing business in Ireland is low enough to make it viable for products to be made at a competitive enough price in Ireland to be sold on the international market, and I do not solely mean the heavy reliance on FDI companies who make up such a disproportionate % of our exports, I also mean indigenous companies making products to export, not just viagra or cocal cola etc.

For that to happen costs have to come down across the board, but in partiucular wages, which I am afraid will lead to a lot of long term pain for those who will have debts taken on say 2004/5/6 but will have to service them on salaries that will have diminished considerably.

[Shambo]

I strongly doubt we will reach 2000 levels in terms of GNP per capita (we might for house prices, but I don't think so). .

Can you explain why not?

[jpc]

Ireland had average GDP growth in the 1980s of 3.8%
Foreign investment and growth vs. development: a comparative study of Ireland and Wales */L'investissement etranger et la croissance vs le developpement--une etude comparative de l'Irlande et le Pays de Galles. | Goliath Business News

Cowen's prediction can easily be correct and Ireland can still be in a bad situation.

I strongly doubt we will reach 2000 levels in terms of GNP per capita (we might for house prices, but I don't think so). If technology has been improving by 3% a year (a modest assumption) then this alone should mean we would be 30% about 2000 levels.

To reach 2000 GNP per capita levels would require us to undershoot our potential by 30%. I really can't see that happening.

At a guess 80 % of the building bubble will be removed, including all related components (providers,paint, furnishings, financial ,services etc)
The multinational component is going to suffer more pain due the global slump plus increased price competition.
This will feed into indigeneous suppliers of services to MNC's.
Hope I'm wrong.

[AMCW177]

Why should it take us more than 15 months to reach the bottom?

*shrugs*

Because Japan still haven't found theirs after 20 years?

Yeah, most recessions are over within a year, very long ones tend to be no more than 18 months. But the scale of the readjustment in the Irish economy is staggering. Somewhere between 35 and 50% of GDP is going to vanish peak-to-trough, and there simply is no getting around that.

And we have no real industry of any scale, no engineering culture, no real entreprenurial culture, a very poor support ecosystem for science and technology, a bankrupt banking system, and a bankrupt political system, refugees from the 50s, who don't have a bloody clue about the modern world. And that's before we even mention the corruption that causes high costs everywhere, or the millstone of all those huge mortgages (for which the workers need high wages).

Show me where this magic growth is going to come from? Show me which industry is going to start providing hundreds, never mind hundreds of thousands of jobs?

Everyone in this country is in total denial about the scale of the catastrophe we are still just sleepwalking into, mumbling to one another that shure it'll be grand in the morning. All this "it'll be over by Christmas" is just delusional waffle that has got nothing to back it up except ruby slippers and Santa.

[AMCW177]

In my humble opinion things will only turn around when the cost of doing business in Ireland is low enough to make it viable for products to be made at a competitive enough price in Ireland to be sold on the international market, and I do not solely mean the heavy reliance on FDI companies who make up such a disproportionate % of our exports, I also mean indigenous companies making products to export, not just viagra or cocal cola etc.

For that to happen costs have to come down across the board, but in partiucular wages, which I am afraid will lead to a lot of long term pain for those who will have debts taken on say 2004/5/6 but will have to service them on salaries that will have diminished considerably.

Spot on. Only when we have local companies producing goods that the rest of the world wants to buy will we start creating jobs again. And nobody in power seems to care about this at all.

[Shambo]

I expect 2001/2002 levels. I base it on price/rent ratios. Of course it could undershoot, but I think 2001/2002 prices are about right.

That will be determined by supply and demand, and given that in the last Census there were over 200,000 unoccupied houses/apartments in The Republic Of Ireland (2006) and the deterioration in employment etc since then, I cannot see demand outstripping or even equalling supply for a long time yet, which will inevitably keep downward pressure on prices.

[AMCW177]

Yer as delusional as Clowen. Young population, international factors, a US upturn will save us, blah blah blah. It's all nonsense.

Until we tackle costs, vested interests, corrupt practices, and put in place a real framework for supporting indigenous export companies then this economy is going nowhere. Nowhere! Every single sector of the economy is contracting. Where is this magic growth going to come from?

Is your inferiority complex so bad that you just can't envisage the Irish people actually taking charge of their own destiny and at least trying to make their own way in the world? Or are you content to passively await crumbs from the table of your betters?

[Shambo]

Yer as delusional as Clowen. Young population, international factors, a US upturn will save us, blah blah blah. It's all nonsense.

Until we tackle costs, vested interests, corrupt practices, and put in place a real framework for supporting indigenous export companies then this economy is going nowhere. Nowhere! Every single sector of the economy is contracting. Where is this magic growth going to come from?

Is your inferiority complex so bad that you just can't envisage the Irish people actually taking charge of their own destiny and at least trying to make their own way in the world? Or are you content to passively await crumbs from the table of your betters?

Very true, it is sad that we have to wait for The USA to get better before we do

[AMCW177]

Very true, it is sad that we have to wait for The USA to get better before we do

Well we don't have to, but it seems to be the full extent of the "thinking" by this moronic servile Government! Republican Party my arse.

[Dillinger]

I think the most important point you make is with regard to corruption. This is a hugely important determinant of growth.

Although the housing boom was entirely our own fault, international factors have a role in our decline. When the US sneezes we catch a cold, so as the US does better, we will do better also. We have a far younger population than the rest of the EU.

It has not sunk in with the young just how bad things are, and, you have to ask yourself, can the Hello Magazine/ POP Idol generation cope with a Depression ?. They are all still running off to Blanchardstown shops or the Balearic Islands, using Mr Credit Card. They are still telling me it will all be over by the end of next year. I am not sure how they know this when all they read is OK magazine.