Quarterly Economic Commentary, Winter 1992/3

Cantillon, S. and Baker, T.J. and Scott, S. (1993) Quarterly Economic Commentary, Winter 1992/3. [Working Paper]

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Abstract

On the partial evidence so far available, it seems likely that there was a slight decline in economic activity in the final quarter of 1992. However, the economy had been expanding quite rapidly before the September currency crisis, so that the annual growth rate of real GNP in 1992 is estimated at 2% per cent. The conditions of international uncertainty and very high domestic interest rates, which were responsible for the downturn in late 1992, have persisted for most of the first quarter of 1993. It is thus reasonable to assume that the economy continued to stagnate or decline. The restoration of industrial competitiveness through the devaluation of the Irish pound, the subsequent reduction in domestic interest rates, and the injection of substantial EC capital funds should all help to reverse this decline. Nevertheless the outlook for 1993 remains very uncertain, and this uncertainty is likely to be compounded by the absence of trade statistics for the first half of the year. Any forecast must be regarded as tentative, and subject to a large margin of error. With this proviso, the least unlikely outcome for 1993 is a growth of real GNP of about 1 per cent, price inflation of 3 per cent, consolidation of the current account balance of payments surplus at about 6 per cent of GNP, and a small decline in the average number at work...

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