Economic predictions are this way and that


Minister Michael Noonan.

The market is up, the market is down. Ditto with the economy, but the old truism doesn't quite apply right this minute to an Irish economy that is cold and on hold.

Still, the potential is there for better days, at least according to finance minister Michael Noonan. Noonan, according to reports last week, is predicting that Ireland will "sky-rocket" if the global economy improves.

Noonan, according to the Irish Examiner, defended his government's austerity measures, saying Ireland had been forced to become more competitive on a worldwide scale.

"We have become so competitive in this period of austerity that if the world economy picks up, then Ireland can take off like a rocket," said Noonan.

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"We may have very strong growth rates in the next couple of years."

The minister, who was in Paris as part of a trade and investment mission to coincide with St. Patrick's Day, said that Ireland's economy could see growth rates of two percent in 2013.

"If the world economy takes off, you can add another two point something on it," Noonan added.

Noonan also pointed out that Ireland's competitiveness level had risen 16 percent due to the government's austerity policies. As a result,

Ireland was now Europe's best prospect among bailout program countries to return to the bond market, "which is what we intend to do in 2012/2013."

Noonan's guarded optimism did not exactly reflect an assessment from the Moody's ratings agency, issued just a few days before.

The republic's flatlining economy could soon need a second financial bailout, the agency said.

It predicted that by 2014, Ireland could be forced to go hat in hand to the European Union for another bailout, this after the current program of aid, amounting to €67.5 billion expires.

Moody's also warned that a "No" vote in the upcoming fiscal treaty referendum could actually scupper the country's chances of successfully gaining more funds under the European Stability Mechanism.

Moody's described the decision to hold a vote on the fiscal treaty - which the Irish government has signed on to - as "credit negative."

"If voters reject the referendum, it could also leave Ireland isolated, particularly if it ends up being the only euro area country to reject the pact," Moody's said.

 

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