Wednesday, 14 July 2010

Thousands Of Irish People Emigrating...

5,000 will leave each month over job crisis...

120,000 to emigrate by end of next year, ESRI predicts:

MORE than 120,000 people -- or 5,000 a month -- will emigrate by the end of next year to escape unemployment at home, the State's economic think tank warns in its latest report.

That means the equivalent population of Cork city will leave over the next 18 months.

The figure is 20,000 more than the Economic and Social Research Institute (ESRI) estimated in its last report, just three months ago.

Jean Goggin, a co-author of the report, said: "It's quite significant -- we expect 70,000 to leave in 2010 and a further 50,000 in 2011."

Unlike last year, most of these emigrants will be Irish, the figures suggest.

Many foreign workers -- mostly in construction and retailing -- whose jobs disappeared have already left the country.

"In the two years 2008 and 2009, the number of non-nationals employed in Ireland fell by 87,500," the report says. "The biggest adjustment was in the number still in Ireland. It fell by 60,200, or 12pc."

"It is very difficult to estimate how Irish workers will react to the situation," senior researcher Alan Barrett said. "But the evidence from things like visa applications for Australia points that way."

The ESRI does expect the number of jobs in the economy to stabilise at around 1.85 million this year and next. But the labour force will grow by around 140,000. If the emigration forecasts prove correct, unemployment will rise by 20,000, keeping the jobless rate at 13pc.

"Unemployment levels may fall in 2011 only because so many people are leaving the country," Fine Gael Finance spokesman Michael Noonan said.

"There will be no net job creation over the next two years, with employment levels set to remain static. The ESRI's report should set alarm bells ringing at the highest levels of Government."

The ESRI's general forecast is that the economy will be broadly flat this year, with output rising by just 0.25pc, and national income falling by 0.5pc, after last year's catastrophic 10.7pc decline.

Growth will resume next year, with national income growing 2.75pc. Most of this will be driven by a 4.75pc rise in exports. Personal consumption will grow just 1.5pc, after deducting inflation, which is forecast at 1.25pc. The economy would have grown by 3.75pc -- one percentage point more -- next year were it not for the impact of the €3bn promised tax rises and spending cuts in the December Budget.

The ESRI thinks the tough Budget is necessary in Ireland, given the state of the public finances, although it queries the need for austerity measures in Britain and Germany.

If there is no €1bn property tax, the impact on the economy could be even more severe, because existing taxes will have to rise by more, Dr Barrett said.

Government sources say nothing has yet been decided on in terms of the Budget. If there is no property tax, ministers would have to decide where else to raise the revenue and a mild property tax cannot be completely ruled out, the sources say.

Ireland will record what may be the biggest peacetime deficit for any EU country this year if, as expected, the €20bn in future payments to Anglo Irish Bank and Irish Nationwide have to be added to the official deficit.

That would bring the deficit to 19.75pc of GDP, although it would fall back to 10pc in 2011, as the bank money comes off the total and the Budget knocks up to 2pc of GDP off government borrowing.

The report says the global recovery has been stronger than expected, but the risks to the Irish economy seem greater than even three months ago. The debt crisis in Europe, with banks unwilling to lend to governments, has cast doubt over the recovery in the euro area.

Budget cuts in Britain and Germany also risk damaging the fragile recovery. "These are our main trading partners. We need strong export growth even to achieve these forecasts, and so we need those economies to perform well," Dr Barrett said.

House prices are forecast to fall again next year. "We expect the cumulative fall in new house prices to be close to 50pc from the peak by the end of 2011," the report says.

Report by Brendan Keenan - Irish Independent

No comments: