The Governor of the Central Bank, Maurice O'Connell, has said the Celtic Tiger phase of the Irish economy may be over. He added that there is probably no growth in the economy at the moment.
Speaking before the Oireachtas Committee on Finance and the Public Service, Mr O'Connell said the short term outlook was not good, and that the momentum of the slowdown had accelerated. He said the economy next year would be very subdued.
He said the prospects for a sharp recovery following a sharp downturn - a V-shaped recovery - could be delayed. He said that if the downturn intensified, it was unlikely that Ireland's growth rate next year would be the 3.5% as suggested yesterday by the ESRI.
With regard to the budget, Mr O'Connell said the key priority was that we managed our affairs prudently. He said he would not advocate a complete ban on borrowing, but indicated that any borrowing should be kept to a minimum.
He added that continuing investment in public infrastructure was very important at this time, and that the National Development Plan should be carried through.
He said all eyes were now on the US, although recovery there will be more difficult than earlier envisaged. He said this had consequences everywhere, not least in Ireland which is vulnerable to outside developments.
