Notes on the Front

Friday morning and I’m looking forward to the weekend and hopefully catching a few rays.  A friend, however, sends me a copy of the Goodbody report – the most pessimistic forecast yet.  It’s already raining.

Goodbody predicts the economy will decline by 2.2 per cent this year but the good news is that next year, things will improve: growth will be absolute zero.  Well, better than falling I suppose.  But its analysis of the trends are just as depressing:

Domestic demand (private and Government consumption plus investment) will continue to decline, even throughout next year.  The scale of the turnaround is phenomenal: investment (mostly housing in our property-obsessed economy) will fall from a high of 14 per cent in 2005 to a negative 17 per cent this year.

Exports will be of little help – only a slight increase in volume this year and even less next year.  Even our vaunted services exports are lagging.

Housing completions will drop from a high of nearly 80,000 this year to 30,000 next year with property prices continuing to plummet

Wage growth will be the lowest in many years

The Exchequer balance?  From a surplus of €2.3 billion in 2006, it will fall through the floor by next year with a deficit of nearly €11 billion

Disposable income will rise by a mighty 0.1 per cent next year but debt/income ratio will continue to rise – no doubt people resorting to borrowing to make ends meet

• And the job market is contracting with unemployment expect to rise close on to 8 per cent next year (a figure I suspect that will worsen).

And all this is predicated on a strengthening dollar and two interest rate cuts in 2009.  If that doesn’t hold then we may be rewriting all these figures downward again.

Depressing?  You bet?  Any sign of light at the end of the tunnel?  Goodbody says ‘yeah, sure, why not’ but then they don’t want us all to turn suicidal or start fleeing the country (you can’t anyway from Dublin Airport – we’re trapped).

And if anyone thinks that we will climb out of this through the ‘free interplay of unregulated market forces’ – give me a break.  I’ve never been a fan of actually existing socialism (i.e. command economy), but a little bit of marshaling the nation’s resources under some sort of plan to give us a little bit of hope wouldn’t go amiss.  But then I remember that Mary Coughlan, TD is Tainaste and Minister for Enterprise.

There’s a line from a forgettable film where the character says: ‘When everything is black and there’s no way out and you have no hope – it takes a brave man to kick back and party.’

So party on, casualties of Fianna Fail’s war against the Irish economy.