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The economy has weakened substantially and employment is under threat due to competitive pressures. This was the central message from this week's Central Bank quarterly bulletin, supported by trade figures published yesterday. Apart from the pharmaceutical/chemical sector, the rest of industry is contracting and the weak international outlook does not indicate an early upturn.

Part of the reason for the current economic uncertainty is, of course, the war in Iraq. As the International Monetary Fund warned yesterday, a lengthy war could undermine hopes of a global recovery. Hopes of growth in the Irish economy are based on just such a global upturn later this year and clearly this cannot now be guaranteed.