Employers Group Predicts Better Outlook

One of Ireland's leading employers groups has revised its growth predictions for this year and next year marginally upwards.

The IBEC, which represents Irish business, published its economic forecasts for 2010 and 2011 in its latest Quarterly Economic Trends revising its previous predictions for 2010 from -0.7% up to -0.1%, whilst forecasting 2.3% growth in 2011 instead of its earlier estimate of 2.3%.

IBEC Chief Economist, David Croughan said: "Improving international demand and the significant weakening of the euro in recent months have provided a much more positive environment for Ireland's export sector. Net exports will make a positive contribution to growth during 2010."

Mr Croughan said the outlook for consumer demand had improved since the start of the year and is now helping to lift the economy out of recession. "The recovery has been somewhat stronger than we expected," he said.

However, the IBEC Economist added that outlook for 2011 continued to be shrouded by uncertainty as the sovereign debt crisis continued to hang over the euro area.

Yesterday, further financial trouble hit the Eurozone when it emerged that Hungary may be in the same dire position as Greece, who recently forced the cash strapped union to bail out a number of its debts.

In late 2008, Hungary was also forced to seek €20.9 billion in emergency financing from the International Monetary Fund and the European Union.

After an emergency meeting on the economy by the country's cabinet last night, Hungary’s center-right government pledged it would to contain its budget deficit and cut spending.

Chief of Staff in the Hungarian Government, Mihaly Varga, said the cabinet were considering implementing a flat personal income tax of 15 to 20%. Other government officials said the possibility of a tax on banks was also being discussed.

(DW/GK)