Unemployment to rise, warns NERI
The Nevin Economic Research Institute has questioned the Government's capacity to reach its budgetary target of 3 per cent of GDP by 2015.
In its fourth quarterly economic bulletin, economic think tank, the Nevin Economic Research Institute, said the Government was unlikely to reach its target of a 3 per cent budget deficit by 2015, due to low growth and continuing high levels of unemployment.
"Uncertainty in key international trading partners allied to the overhang of household debt and unemployment in both economies on the island of Ireland is likely to hold back full economic recovery by a number of years," it said.
NERI has predicted GDP growth of just 0.6 per cent for 2013 and 0.8 per cent for 2014, saying the first time the economy will return to significant growth, will be in 2015 when GDP growth of 1.8 per cent is expected.
The Government is forecasting the economy will grow by 1.5 per cent this year, 2.5 per cent in 2014 and 2.9 per cent in 2015, and has given 0.9 per cent as its final outlook for 2012 growth.
Research by the Institute also found that two thirds of households have an income below the national average. Some 62 per cent earn less than the national average, while the top 30 per cent of households earn more than €70,000. Some 56 per cent of households earn less than €50,000 and 33 per cent earn less than €30,000 according to NERI. Just 14 per cent of households have a gross income above €100,000.
NERI has also predicted that unemployment will rise further in 2014 and 2015.
"The effects of Budget 2013 are likely to further reduce economic growth and employment, especially with regard to the domestic economy. Compared to a baseline of no fiscal consolidation, the NERI has estimated that Budget 2013 will cost between 25,000 and 35,000 jobs."