ECONOMIST FIGURES 'LIKELY TO WORSEN' - There were economic figures and stories coming out our ears this week. The European Commission gave Ireland until 2013 to bring the budget deficit into line with EU rules, more time than other countries.
The Taoiseach said the Government may borrow more than originally planned this year. The Central Statistics Office reported record falls in economic growth in the final three months of last year, and the Finance Minister Brian Lenihan said tax revenue was expected to be €3 billion lower than forecast this year.
Alan McQuaid, economist at Bloxham Stockbrokers, described the CSO figures yesterday as dreadful, and the first quarter could be worse as it looked like retail sales had 'fallen off a cliff'. He said it would be no surprise if GDP dropped by 10% or more at some point this year.
The economist said the challenges facing the Government were very difficult, but he would be wary of raising taxes too much, and cutting spending was a better option - though this would also take money out of the economy.
Mr McQuaid said there was a risk that if the Government did not come up with a credible strategy on April 7, financial markets could dismiss it and send our Government bond yields soaring. He said the UK had difficulty with its bond auction this week, and it could not be assumed that we could borrow 'willy-nilly'.
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NEWS AND CURRENCIES - The Government has appointed UCD Professor Niamh Brennan as chairman of the Dublin Docklands Development Authority. She succeeds businessman Gerry McCaughey who resigned earlier this week following revelations about his use of a legal tax loophole after the sale of his timber frame business Century Homes to building group Kingspan.
On the currency markets the euro is trading at $1.3585 and 93.75p sterling.
