The front page of the Irish Times today is a piece detailing Brian Lenihan’s speech to a conference yesterday in which he stated that there has been a ‘remarkable turnaround’ in the Irish economy over the past year.  Earlier in the week Brian Cowen argued that Ireland is on the road to recovery.  Hmmm.  This after the economy contracted by 1.2% in Q2 2010.  The following data struggle to show stabilisation, let alone a turnaround or recovery.

Ireland vs Germany 10 year government bond yield spread (source: Bloomberg)

Government balance, % of GDP (Source: ESRI)

Quarterly GDP and GNP constant market prices (Source: CSO)

% unemployed (Source: CSO)

House prices (Source: PTSB/ESRI)

Net-migration (Source: CSO)

When the lines/columns on these graphs reverse their present trajectory in a sustained way then we might start talking about ‘remarkable turnarounds’.  There is nothing remarkable about the Irish economy at the minute, other than how badly it has fared over the past three years.

And yes, these graphs do not show a very postive picture.  And yes, this post could be accused of being negative, and such negativity may be damaging to the reputation of Ireland (as a number of commentators have lamented this week, not least the government), but realism and positive action are going to get us out of the hole we’re in not spin and bluff.  If where we are at at the minute is in the middle of a ‘remarkable turnaround’ then god help us; it’s not even clear that we’re at the start of one.

Rob Kitchin

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