Slower global trade, bigger labour shortages, a gradual loss of competitiveness and another interest rate increase here will all drive Ireland's economic growth rate down from 11% this year to 7% in 2002.
That is why the OECD maintains in its twice yearly report that Ireland has passed the peak of the economic boom. The report was published yesterday.
Inflation, now at 6.8%, will average about 4% in two years time but will be back up to 5% by 2006 - making it the second worst out of 28 OECD countries.
The OECD report says the Government should not cut VAT to reduce inflation because it will not work. They also warn against cutting taxes on motor fuels because of environmental and other considerations. The organisation urges the Government to use budget tax cuts to encourage those who are not currently in the labour force to participate, rather than to increase the net real wages of those who already have good jobs.
