EU predicts Irish growth of 3% in 2011

Wednesday 05 May 2010 15.02
European Commission - Irish economic outlook revised sharply upwards
European Commission - Irish economic outlook revised sharply upwards

The EU Commission has forecast that the Irish economy will grow by 3% next year. This is one of the highest levels of growth forecast in this morning's figures from the Commssion.

At 3% predicted growth, Ireland is alongside other countries who experienced massive falls in recent years, like Estonia, Latvia and Lithuania.

The Commission says that the economy will fall by 0.9% this year. This again is an upward revision from a previous forecast for a 1.4% fall. Its figures say the economy here declined by 7.1% last year. This compares to a previous forecast of -7.5%.

Read the full forecast here

European Economic and Monetary Affairs Commissioner Olli Rehn said that Ireland took bold, credible consolidation efforts and fiscal consolidation is paying off now, and that the Irish economy is recovering.

'It is essential Ireland will continue to take measures of fiscal consolidation and if needed take even further measures,' he added.

Meanwhile, the euro zone economy as a whole is set to grow by 0.9% this year, faster than previously thought, the EU Commission said today, but debt-laden Greece's economy is set to contract by 3%.

'The improved outlook for economic growth this year is good news for Europe,' said EU Commissioner for Economic and Monetary Affairs, Olli Rehn.

'We must now ensure that growth will not be derailed by risks related to financial stability. Sustainable growth calls for determined fiscal consolidation efforts and reforms that enhance productivity and employment,' he said.

The 0.9% economic growth forecast for the euro zone contrasts sharply with the unprecedented 4.1% contraction in recession-hit Europe last year. In February, when the commission released its previous forecasts, the growth this year was put at 0.7%.

For the 27-nation EU as a whole the economic growth forecast for 2010 was put at 1%.

But the situation is very different for Greece, as its euro zone partners prepare a multi-billion euros rescue package to prevent it defaulting on its massive debts.

The prediction of a 3% contraction in the economy contrasts sharply wuth the earlier estimate of a much more gentle fall of 0.3% foreseen last November.

For 2011, Brussels still sees the Greek economy in recession, though with the economic squeeze limited to 0.5%. In November, growth of 0.7% was predicted for next year.

For Spain and Portugal, the two euro zone countries considered most at risk after Greek, the commission revised its growth predictions upwards. For Spain it see a rise in economic activity of 0.4% this year, while the rate for Portugal was put at 0.5%.