Just Released: "Ireland Business Forecast Report Q2 2013"

Fast Market Research recommends "Ireland Business Forecast Report Q2 2013" from Business Monitor International, now available

by Bill Thompson

(WireNews+Co) - Boston, MA - 21 February 2013

Core Views - We forecast Irish real GDP growth to be 0.4% in 2013 and 1.4% in 2014, as suppressed European demand for Irish exports and an intensification of the government's fiscal austerity programme weighs on the country's prospects for a strong economic recovery.

With a commitment to reducing Ireland's fiscal budget deficit from 9.9% of GDP in 2011 to 3.0% in 2015, we expect the impacts of the government's fiscal austerity drive to intensify in 2013. However, the degree of fiscal consolidation will be insufficient to prevent Irish government debt reaching over 120% of GDP in 2015.

Fiscal austerity measures and bleak economic conditions will result in an uptick in political unrest in 2013, as Irish voters become increasing disillusioned with the Fin Gael/Labour governing coalition. While we expect Ireland to remain on the consolidation path set out by the EU/IMF, we believe increased political conflicts will make the task increasingly challenging over the next few quarters.

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Key Risk To Outlook

The government's ability to guarantee a successful bailout exit rests on the country getting EU help with its debt servicing costs. While we do expect a deal on easing bank debt to be agreed in 2013, a failure to do so could cast serious doubts on the government's ability to meet its fiscal obligations and would apply downside pressures to our 2013 and 2014 growth outlooks.

Partial Table of Contents:

Executive Summary

Core Views

Key Risk To Outlook

Chapter 1: Political Outlook

SWOT Analysis

BMI Political Risk Ratings

Political Analysis

Threats To Fiscal Consolidation Continue To Mount

- The Irish government's sixth austerity budget revealed a further EUR3.5bn of new taxes and spending cuts on December 6, implying the impacts of the government's fiscal austerity drive will intensify in 2013. Ireland's strict austerity programme has won praise from the IMF - which approved the eighth review of the country's EUR85bn EU/IMF bailout plan in December - but also warned that deteriorating economic conditions are a threat to continued consolidation in the country. With the IMF advising Ireland to defer additional austerity budgets until 2015 if it misses its 2013 growth targets, we caution that the Irish government's attempts to meet fiscal targets will lead to increased political rifts and social unrest over the next few quarters.

TABLE: POLITICAL OVERVIEW

Chapter 2: Economic Outlook

SWOT Analysis

BMI Economic Risk Ratings

Economic Activity

Bleak Growth Outlook In 2013

- While we expect the Irish economy to return to growth in 2013, we caution that the country's economic growth story remains gloomy. With data released by the Central Statistics Office (CSO) revealing that real GDP contracted by 1.1% y-o-y in Q212, we reiterate our forecast of 0.4% real GDP growth in 2013, and 1.4% growth in 2014. We expect the country's GDP growth to be weighed down by the ongoing sovereign debt crisis in Europe, and by the sluggish performance of key export markets.

TABLE: GDP BY EXPENDITURE, REAL GROWTH %

Food & Drink

Chapter 3: Key Sectors

Food & Drink

Food

TABLE: FOOD CONSUMPTION INDICATORS - HISTORICAL DATA & FORECASTS, 2010-2017

Drink

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