IBEC REVISES ECONOMIC PREDICTIONS UPWARDS - Employers' group IBEC says the Irish economy is beginning to pull out of a deep recession. In its quarterly economic trends report, IBEC has revised its economic forecasts upwards, forecasting that GDP will shrink by 0.7% in 2010, compared to an earlier prediction of 1.6%. Next year it forecasts growth of between 1.7% and 2.1%, but it warns that industrial action could undo credibility that has been established by action to stabilise the public finances.
Fergal O'Brien, IBEC's economist, says the group is more optimistic about the country's recovery from recession as signs of renewed confidence is emerging from both consumers and businesses over the last couple of months. On the international front, he says that Ireland's main trading partners have also come out of the worst of the recession faster than predicted, particularly the US.
But the economist warns that the global situation remains volatile, as governments try and manage their exit strategies from the extraordinary measures taken to relieve the effects of the economic downturn on their respective economies. He says that the US could see lower growth next year than it sees in 2010. Domestically, issues remain about the country's creditability, Mr O'Brien says. He says Ireland remains very much in the spotlight and anything that is done which could undermine efforts to fix the public finances could be very damaging.
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MORNING BRIEFS - Aryzta has reported revenues of €800.9m for the six months to the end of January in its food division, down 7.4% from the same time the previous year. Operating profits for the six month period were steady at €106.5m. The food group formed in 2008 through the merger of IAWS and Swiss bakery group Hiestand. In a statement, Aryzta boss Owen Killian said the global economic recovery has yet to reach consumers who continue to adjust their spending in response to tough economic conditions. The company said that in Europe the decline in revenue is still most evident in Ireland and the UK from the continuing economic downturn and customer credit concerns.
*** Finance ministers from the 16 countries using the euro meet today in Brussels to discuss the Greek debt crisis and its progress in introducing the austerity measures needed to regain the confidence of the markets. Proposals include direct loans from individual governments and a system of loan guarantees, all tied to strict Greek observance of fiscal discipline and the implementation of structural economic reforms. But ministers are not expected to make an explicit offer of aid, because Greece has made no request and because its fiscal outlook is now regarded as less threatening.
*** On the currency markets the euro is trading at $1.3738 cents and 90.58 pence sterling.
