Bloomberg has reported that Ireland’s Minister for Finance, Michael Noonan’s, forecast of a faster growing Irish economy maybe over-optimistic.

A new Bloomberg survey, carried out among 11 economists, showed that Ireland’s GDP (Gross Domestic Product) will rise by one percent in 2012. Last month Noonan forecast a 1.3 percent increase on 2011.

The hopes of an export-led recovery in Ireland have been quashed by the economists.

Conall Mac Coille, an economist at Dublin-based securities firm Davy, said, “The most worrying impact of the debt crisis on the Irish economy will be through reduced export demand…It’s likely to have a significant impact.”

Exports amounted for 101 percent of Ireland’s GDP in 2010.
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It’s predicted that the euro-region’s economy, as a whole, will shrink by one percent in 2012, according to HSBC Holding Plc economists.

Alan McQuaid, chief economist at Bloxham Stockbrokers told Bloomberg, “It looks like the euro zone is heading for a recession…Given what is going on in the world as a whole, the risks are to the downside.”

Austin Hughes, chief economist at KBC Bank Ireland said, “What Ireland is doing is necessary but not sufficient for its recovery…It can’t be sufficient because that is going to be determined by events outside our control.”

Bloomberg went on to spell out Ireland’s economic situation in stark figures:

-    Ireland’s economy shrunk by 15 percent between 2008 and 2010

-    House prices have dropped by 46 percent since 2007

-    House prices will fall by another nine percent in 2012, according to their survey

-    Unemployment will average at 14.2 percent in 2012

-    Noonan plans to cut Ireland’s budget deficit to 8.6 percent of GDP from 10 percent in 2011