Irish economy appears to be in freefall
The Irish economy appears to be in freefall today with the central bank suggesting there will be a fall of 6% in Ireland's gross domestic product this year, which is a whole two percentage points greater than forecasts only a few weeks ago. However, more alarmingly the 6% reduction is also under review and may well be increased in the weeks and months ahead. After a period of substantial growth when the Irish economy attracted significant numbers of overseas businesses the country is now in serious trouble and the economy is in a downward spiral.
The collapse of the banking sector over the last few months has not only affected the flow of funds within the Irish economy of late but also impacted on the trust factor between the financial services sector and the Irish consumer. There has also been a sharp fall in exports from Ireland with the likelihood that unemployment will rise to over 10% by the end of 2009.
After seemingly overcoming the initial obstacles created by the early stages of the worldwide recession the Irish economy has come under serious pressure over the last few months. The long months of good work by the authorities have unwound literally overnight and there is speculation that the Irish government will need the support of the European Central Bank to save the economy.
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