'Celtic Tiger' author says boom tells tale

THE UK investment adviser who is credited with coining the phrase Celtic Tiger for Ireland’s economic boom says the phrase may have encouraged Irish people at the tail end of the boom to believe that the good times would never end.

Kevin Gardiner, head of investment strategy at Barclays Wealth, says the phrase coined in a 1994 outlook report on Ireland’s economy may have led to more optimistic domestic sentiment during the latter days of the boom.

As a Welshman, he likened this sentiment to the performance of the Wales rugby team, he said.

“When things are going well on the pitch we think we are the best team in the world and we will never lose a game,” he said.

“There is a degree of that here – cliches to some extent can amplify that sort of sentiment.”

Mr Gardiner said stronger growth in the global economy had left multinational firms with higher-than-expected levels of cash which would encourage them to invest in countries like Ireland.

However, he cautioned that any increase in Ireland’s corporation tax rate of 12.5 per cent as a condition of external financial assistance would complicate this.

“Low taxes did do a fair bit to get the whole Irish supply side growth story going to begin with,” he said. “I think it would be a great pity if that tax regime were to be dismantled overnight.”

He said he believed the Government would “muddle through” and he forecast economic growth of 1 per cent to 2 per cent in 2011.