SIPTU, the country's largest trade union, has said it believes the recession will last longer than the ESRI forecast.
SIPTU's head of research Manus O’Riordan sait the recession would be made worse if the Government curtails its spending programmes.
He said the ESRI had made a mistake by assuming the drop in consumption growth in the economy was the result of weaker consumer confidence.
Instead he said it was the result of a decrease in the real value of workers earnings over the past year.
Mr O’Riordan said there cannot be a recovery in consumer spending growth unless the real wages of workers are increased.
He insisted that a pay increase in line with inflation was the same as pay restraint because it would only be enough to maintain living standards.
SIPTU criticised the ESRI for not recognising this in its most recent report on the economy.
It said the ESRI forecast of a resumption of consumer spending growth of 2 per cent next year is not realistic because it underestimates the need for wages to grow by more than the rate of inflation if there is to be a way out of recession.
SIPTU also said the problem in the public finances is not as serious as the Government is making out and it agreed with the ESRI suggestion that the Government should break the EU borrowing rules rather than engage in sharp cuts in spending.
Mr O’Riordan also said that infrastructure certain projects such as the Dublin Metro rail project should be postponed and that spending on the up-skilling and training of workers under the National Development Plan should be prioritised.
Wage freeze idea 'absurd'
Meanwhile, General Secretary of IMPACT Peter McLoone has said Ireland does need partnership, but that a wage freeze is an 'absurd proposition'.
The trade union leader was speaking on RTÉ Radio's Morning Ireland about the future of negotiations involving trade unions, the employers and the Government. He said this was the most difficult time he could remember but the difficulties were not of the magnitude of the 1980s and 90s.
He said: 'What we didn’t have in the 80s was the Social Partnership framework that we have been working under for the last 21 years.
'The first thing that is needed, and this is required at a political level, is a clear message as to whether we are going to address these challenges, that were identified by the Taoiseach last night, within the framework. We’ve been in Government buildings for more than two months and we have very little progress to report.'
He continued: 'I think it is critically important that the Government would engage across the negotiating table with the social partners rather than through the airwaves or dinner functions.'
Mr McLoone recognised the country was different now than 12 months ago but said it should be within the collective grasp to deal with the problems.
Talks have yet to take off, he added.
Mr McLoone was speaking following comments made by the Taoiseach, Brian Cowen, at IBEC's annual dinner last night.
