Research and Markets: Country Risk Service Ireland 3rd Quarter: 2012-16 - GDP in 2016 Will Still Be Below Its 2007 Pre-Crisis Peak

Research and Markets (http://www.researchandmarkets.com/research/j424sj/country_risk_servi) has announced the addition of the "Country Risk Service Ireland 3rd Quarter" report to their offering.

The Economist Intelligence Unit expects the Fine Gael-Labour Party coalition to serve its full term to early 2016. However, prolonged austerity and economic restructuring are likely to erode its popular support and exacerbate differences within the coalition. A major risk is that if the euro area crisis escalates, the ensuing financial turmoil would hit Ireland. We expect that the government will undergo a managed sovereign debt restructuring with the co-operation of the banks, the EU and the IMF in 2013, when the current EU/IMF bail-out programme expires, and a haircut of around 25% should reduce public debt to just under 100% of GDP at end-2013. The export-driven economic recovery that got under way in the first half of 2011 has stalled. We expect GDP to contract in 2012 and to recover gradually from 2013. Output in 2016 will still be below its 2007 pre-crisis peak. We expect the current account to remain in surplus during the forecast period.

Tensions within the coalition rose over the so-called Croke Park agreement signed with the public-sector unions in 2010, which promised not to introduce any further pay cuts or compulsory redundancies until 2014. The government is unlikely to risk revising the agreement and undermining coalition cohesion. But the debate will probably become more heated when the 2013 budget is drafted.

The European Central Bank (ECB) cut its main refinancing rate from 1% to 0.75% on July 5th. We now expect a further cut of 25 basis points by the end of 2012.

Key Topics Covered:

Risk assessment

Central scenario for 2012-16: Political stability

Central scenario for 2012-16: Election watch

Central scenario for 2012-16: International relations

Central scenario for 2012-16: Policy trends

Central scenario for 2012-16: Fiscal policy

Central scenario for 2012-16: Monetary policy

Central scenario for 2012-16: Economic growth

Central scenario for 2012-16: Inflation

Central scenario for 2012-16: Exchange rates

Central scenario for 2012-16: External sector

For more information visit http://www.researchandmarkets.com/research/j424sj/country_risk_servi