Bank of Ireland forecasts loss of full employment

The Bank of Ireland published its Quarterly Economic Outlook today. Its outlook for the economy falls into line with other recent forecasts. The main points are:

• The falloff in house construction, high oil prices in the first half of 2008 and the global credit crunch will lead to a decline in our GDP of 1.6% this year, the first decline in national income in 25 years. They said they cannot forecast the fall in GDP in 2009.
  

• Exports will provide the only substantial support to economic activity.

• There are two positives that may restore some confidence - dropping oil prices and lower interest rates.

• Unemployment will go over 7% next year, moving the Irish economy away from full employment (160,000 or fewer unemployed) for the first time in a decade.