I came on here in a Spring 2007 thread over a year before the likes of the ESRI et al to say that the economy in 2008 was heading for recession and was proven correct (as well as being lambasted by posters who have long departed this forum for saying so). I have also been banging on about the coming crisis in the public finances long before it ever became a headline issue in current affairs. Well my next prediction is that the economy will likely hit an unmerciful wall from 2010 onwards as there are a number of factors now coming together that will send the Irish economy into a virtual deathspiral.
Forget all the wishful thinking predictions from bank and government economists of the economy returning to growth in 2011. What will in fact happen is that the economy will hit such a wall that we will see GNP fall in excess of 30% from its peak over the medium term to circa 2015. A range of factors are coming into play at the same time to make this inevitable: we have to deflate the economy in what will be a futile attempt to rein in the fiscal deficit; a rapidly increasing amount of national income will go to debt interest repayment; emigration will take off to levels last seen in the 1980's as the population begins to decline; interest rates will start to rise late in 2010 further deflating the economy; and the strait jacket of the Euro will prevent us from gaining competitiveness, particularly against Sterling.
The exact timing of when will hit that wall is something I do not have a crystal ball on, however, it should become obvious by late 2010 that the economy is beyond salvage. Once interest rates start to rise appreciably in tandem with deflating real incomes the levels of default will collapse (what remains of) the banking sector and the economy. At some point between 2011-15 Ireland will default on its sovereign debt and the ECB/IMF will be running the economy on life support but with severely reduced public services, public service pay and welfare payments.
The good news is that we should have a good football team come the 2026 World Cup as football talent thrives in times of economic hardship........