Recession over? Irish economic growth set to double EU average

The Irish economy will return to positivity in 2011 with the growth expected to be double that of the European Union average, according to employers’ body Ibec.

The anecdotal evidence may suggest that things remain as bad as ever, while new claims in recent weeks from UCD Professor of Economics Morgan Kelly – who has become the de facto barometer of the entire Irish economy – suggested that a new wave of defaults on €1m-plus mortgages involving professionals such as solicitors and accountants could cost the already stressed banks a further €8bn.

However, the chief official of employers’ body Ibec (the Irish Business and Employers' Confederation) has posited the upbeat claim that far from being the crisis-ridden outpost of the EU in which we’ve been painted over the past three years, Irish economic growth is set to vastly outpace the average throughout the Eurozone.

Writing in the Irish Times on Thursday morning, Danny McCoy declared, “Ireland’s growth potential is double the EU average and, despite the heavy burden of austerity, we have a much greater capacity to outgrow our debts than our EU neighbours.”

He continued, “Ireland has a largely open and deregulated economy that supports entrepreneurship. We have the most favourable demographics in the EU, and our productivity performance is strong due to excellent labour market skills and world class flexibility in the workplace.”

After three years in which the economy has contracted, any growth at all would represent a significant step forward.

While “double the EU average” might sound great, however, it’s not exactly a prediction of rampant growth given that the traditionally super-strong German economy grew just 0.1% between April and June.

[Main picture via Images of Money/Flickr Creative Commons]