Not with a bang but with a whimper, our view of the economy is coming down to earth. On Wednesday the Central Bank forecast that Gross Domestic Product (GDP) - the main measure of economic activity - will grow this year by 4.25 per cent. Two weeks ago the Economic and Social Research Institute (ESRI) predicted a heady 5.7 per cent.
The Central Bank is not alone in being prudent. Forecasts released simultaneously on Monday, by the employers' organisation, Ibec, and the International Monetary Fund (IMF) put this year's GDP growth rate at 4.5 per cent.
In its most recent measure of what has happened in our economy so far this year - i.e. in the six months to June - the Central Statistics Office says that the economy grew by just over 4 per cent in the second quarter. If those erring on the side of modest figures are correct, growth is good by any standard and is moderating in a timely and desirable way.
But with economic growth, quality matters as well as quantity. Growth remains strong only because sharply declining net exports are being offset by continued strength in housing construction and personal consumption. Net exports cannot be expected to power growth forever. But the strength of recent contraction shows that our decline in competitiveness is coming home to roost. And while a temporary reliance on construction is acceptable, the above forecasters agree that the extent to which this sector is driving growth is unsustainable.
In the nearer term, the IMF has called for spending cuts in the next budget. But the tendency of the IMF to issue remote and insensitive prescriptions has been criticised with some justification. In a pre-election period, there is no chance of such advice being followed. By contrast, the Central Bank's call on Wednesday for the Government to achieve a "balanced budget" is home-grown and friendlier in tone. The objective of a balanced budget is made necessary by the need to improve the efficiency of public expenditure, and attainable by a strong exchequer.
Coming back to the ESRI, if its recent forecast was over-optimistic, it nonetheless retains an excellent long-term perspective on the economy. A study presented recently by two of its economists is a timely contribution to public awareness about the economic consequences of a population ageing. The study calculates the additional burden that will fall on future generations of taxpayers as more old people draw pensions and seek medical care. According to its findings, the tax burden will rise by a modest four per cent up to the year 2050.
But these figures assume that future governments will contain spending and save for the future. This study reminds us that society is a contract between those who are living and those who are yet to be born. All generations have responsibilities to those that follow. This principle commends the Government and Minister for Finance to place a firm emphasis on the issue of pensions in the forthcoming budget.