From the Country Report by atradius it emerges as the Irish economy has recovered after the prolonged and deep recession of 2008-2010. The estimates speak of one GDP growth of 0,5% in 2012, above the Eurozone average, while a further acceleration is expected this year (+1,5%), whose main engine is to be found in net exports, without forgetting that public and private consumption and investments show significant improvements after the decline of recent years. However, despite the wage cuts and structural reforms that have boosted the competitiveness of the Irish economy, reducing inflation and stabilizing property market prices by giving a boost to consumption, this does not reduce its exposure to changes in global demand and the strategies of international investors. And the recovery itself is still far from reaching pre-crisis performance levels: the unemployment rate is still very high (14% from 4,5% in 2007), although it seems to have embarked on a slow process of reduction.
To remain worrying is the financial situation of the country, with public debt rising from 25% of GDP in 2007 to 115% last year, to rise to 118% this year. The reason is to be found in bailout costs of financial institutions to avert the collapse of the entire economy, also thanks to the aid program (85 billion euro) allocated by the IMF/EU/ECB Troika under the constraints of financial austerity and the revival of competitiveness in key sectors of the Irish economy such as law and medicine. The budget deficit itself stands at high levels (7%), despite government efforts.
In this context, international investors seem to appreciate the Irish government's efforts: this can be seen from the reduction in the interest paid for ten-year government bonds, to the lowest levels since the second half of 2010 and now lower than the respective Italian and Spanish ones. Despite the notable improvements, the IMF points out the fact that the support of the European institutions is still needed, especially if one looks at the country's financial situation, for which, among the main American rating agencies, only Fitch expects a stable outlook this year. The path to take could then be that of financing of productive activities through a greater contribution of internal capital, such as pension and insurance funds, duly guaranteed by an appropriate legal system, capable of establishing a circular and cumulative relationship capable of progressively reducing exposure to international investments, public debt and unemployment, but without jeopardizing the growth path undertaken. A perspective that could also be suggested for Italy, given the cultural and economic impasse into which our country has fallen.
