Roubini Says Irish Economy ‘Double-Dipping’ as Services Shrink
Ireland’s economy is “clearly double-dipping,” New York University professor Nouriel Roubini said today, after a report showed the country’s services sector shrank in December for the first time last year.
Services activity fell to 48.4 last month from 52.7 in November, the first decline in 2011, Dublin-based NCB Stockbrokers said in a report today. Domestic demand remains “extremely weak,” NCB said. Roubini made his comments on social networking site Twitter.
Ireland’s economy shrank at the fastest pace in two years in the third quarter of 2011 as cooling global demand dented the country’s hopes of an export-led recovery. Last month, Finance Minister Michael Noonan cut growth projections for the economy in 2012 to 1.3 percent from 1.6 percent, as the euro-region debt crisis escalated.
Export demand as a whole “will be sufficient to outweigh the drag for domestic demand in 2012 to ensure positive gross domestic product number,” NCB said.
Ireland’s unemployment rate fell to 14.3 percent in December from a revised 14.4 percent in November, the Central Statistics Office in Cork said in a report today. That’s still almost three times the December 2007 figure of 4.7 percent.
Noonan is planning 3.8 billion euros ($4.9 billion) of tax rises and spending cuts this year to narrow the deficit after the country’s 2010 bailout. Ireland’s Finance Ministry said yesterday that the shortfall widened to 24.9 billion euros or 33 percent, in 2011 from the prior year, as the cost of rescuing the country’s banking system mounted.
Roubini, co-founder and chairman of Roubini Global Economics LLC, predicted the U.S. housing bubble before the market peaked in 2006, while failing to predict a rebound in global stocks in 2009.
To contact the reporter on this story: Colm Heatley in Belfast at cheatley@bloomberg.net
To contact the editor responsible for this story: Colin Keatinge at ckeatinge@bloomberg.net
Rate this Page