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Economic growth on hold

Predictions of even modest growth in the Irish economy this year have been dampened by the latest assessment from the Organization for Economic Cooperation and Development which is of the view that there will be little or no growth at all this year.

The reasons offered for this gloomy prediction in the OECD's Global Economic Outlook report are increases in taxes, spending cuts, and other austerity measures that are hitting the already hard-pressed Irish consumer ever deeper in the pocket.

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Still, the OECD does see some light down the tunnel. It is predicting growth in the region of 2.3 percent in 2012.

"Ireland is continuing to undertake a comprehensive and vital adjustment program to reduce its macroeconomic imbalances and restore its banking system to health," the OECD said.

"Despite robust export growth, weak domestic demand and ongoing fiscal consolidation have prevented an economic recovery from unfolding so far."

The report pointed to a "modest upturn" of output this year as Irish domestic demand stabilizes followed by a gathering pace of growth next year. At the same time, the OECD is predicting still high unemployment and continued deflation.

According to the Irish Independent, the Irish government last month cut its economic growth forecast for this year to 0.75 percent from 1.75 percent. This compared with a prediction of 0.9 percent from Ireland's Central Bank.

"The fiscal position remains characterized by high deficits, reflecting negative cyclical effects, the collapse of housing-related tax revenues and the large cost of bank recapitalization," the OECD report stated.