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Markets positive on Ireland's prospects

Friday, October 12 07:44:24

Financial markets are relatively upbeat about Ireland's prospects, with that conficence coming from the country's assiduous implementation of reforms, both before and under the Troika programme.

Financial markets are relatively upbeat about Ireland's prospects. That conficence comes from the country's assiduous implementation of reforms, both before and under the EU/ECB/IMF programme, according to a new report on the Irish economy from Barclays.

It says though, that despite good progress to date, the road to recovery is long and unlikely to be easy.

It says that while the banks may now be well capitalised, they are unprofitable and continue to rein in credit. Property prices are still falling, arrears increasing, unemployment high and external demand weak and the macro-financial backdrop is "highly unsupportive". The public deficit is expected to be more than 8pc of GDP this year, making the plan to cut it to 3pc by 2015 an ambitious one, it says.

Barclays' report says that a prolonged period of weak GDP growth is the biggest concern it has about the economy. Ireland's recovery remains highly dependent on strong exports and a stable financial environment. It says weakness in domestic demand needs to be arrested, both to ease the pressure on the public finances and the banks.