NCB UPBEAT ON IRISH ECONOMIC RECOVERY - A new report on the Irish economy from NCB Stockbrokers says Ireland is well placed to recover from a global economic upturn because of the flexibility of the private sector workforce here. Elsewhere, US economic activity continued to contract or remained weak at the beginning of this month, according to the Federal Reserve. But the Fed said in its Beige Book economic review that five of the 12 districts surveyed noted a moderation in the pace of decline, and several saw signs that economic activity in some sectors was stabilising, though at a low level. On the corporate side of things, we have also had better than expected results from both Goldman Sachs and Intel.
Brian Devine, economist at NCB Stockbrokers, says that Ireland's 'legs are wobbling' but it has not suffered a knock-out blow. He predicts that the economy will shrink by more than 8% this year, with another 3% fall in 2010. He also forecasts that the unemployment rate will average 15.8% next year. The stockbroker says that the supplementary Budget achieved its goal of plugging the hole in the public finances, but more needed to be done on cutting spending.
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MORNING BRIEFS - Paul Krugman, the winner of the Nobel prize for economics last year, says Ireland, along with Austria, could follow Iceland into default. Speaking in New York he said that Ireland looked 'pretty bad' because of its large financial exposure. But according to The Irish Times, the Department of Finance says it is very concerned about the level of misinformation about the Irish economy and is taking measures to counter it.
*** Figures today from China show that its economy grew at its slowest rate on record in the first three months of the year. The Chinese economy grew at 6.1%, its lowest rate since records began in 1992 and slower than the 6.3% expected by analysts. It was dragged down by a sharp fall in exports, but somewhat offset by the government's $585 billion stimulus package, which encouraged a surge in lending.
*** US economic activity continued to contract or remained weak at the beginning of this month, according to the Federal Reserve. But it said in its Beige Book economic review, that five of the 12 districts surveyed noted a moderation in the pace of decline, and several saw signs that economic activity in some sectors was stabilising, though at a low level. This stabilisation saw the price of oil rise by more than a dollar a barrel, on hopes that the recession in the US, which is the world's top energy user, might be abating. US crude hit a morning high of $50.30 cents a barrel in Asian trade.
*** On the currency markets, the euro is trading at $1.3181 cents and 88.05 pence sterling.
