Reference: Ireland in dire straits, Bangkok Post, April 21, 2009
Earlier this year columnist Paul Krugman wrote that Ireland had been hit particularly hard by the global financial crisis and that it serves as a canary in the coal mine for the rest of the world to see what's coming down the pike as this crisis unfolds (Ireland in dire straits, Bangkok Post, April 21, 2009). If that is true, I have bad news for those on their toes awaiting an allegedly imminent recovery. At the time Krugman's column was written, the Bank of Ireland's GDP growth forecast for 2009 was 4%, up from -3% in 2008 and heading for recovery. Since then, the Bank has progressively reduced this estimate in stages back into negative territory and all the way down to -8.5% with five months of growth forecast revisions yet to come. The Bank's forecasters are now saying that their economic growth rate will stay in the red through 2011. The alleged imminent recovery has now been postponed even by forecasters who have a history of making rosy forecasts and then revising them downwards. The canary appears to be telling us that the much awaited economic recovery is not imminent and we really don't know how long this thing is going to last or how deep it's going to get.