The days of our growth in double digit figures are over

Irish International Bank (IIB), director Austin Hughes

The quarterly review of the Economic and Social Research Institute (ESRI) in Dublin predicts a return to rapid growth by the end of 2001.

"The slowdown is here," says John Fitzgerald of the ESRI, "but the IT sector will bounce back and the recession is likely to be over by the end of next year."

Hi-tech woes

The job cuts have hit Ireland's hi-tech sector in particular, with multinationals such as Gateway and Celestica shedding many of their Irish staff in the last three months.

But John Fitzgerald points out that Ireland has got off relatively lightly compared to job losses abroad.

"We were surprised that they didn't cut more jobs in Ireland, they cut more jobs outside Ireland than here, for example in the US," he says.

Maturing tiger

At the Irish International Bank (IIB), director Austin Hughes is also optimistic about the future for Ireland's economy. "The Celtic Tiger is definitely getting more mature," he says.

"The days of our growth in double digit figures are over. But the same positive forces that built the Celtic Tiger - demographics, a fortuitous tax regime and low interest rates - are still in place."

Ireland's economic growth has slowed down this year; it is expected to fall to a relatively healthy 5% by the end of 2001.

Terror impact

A closer look at the figures reveals the impact of the economic slowdown since the 11 September terrorist attacks on the US.

At the beginning of the year, economic growth was 11.6%, while it has dropped to just 0.5% in the last three months, bringing the average down to an anticipated 5% by the end of the year.

Experts are anticipating that economic recovery in the US this time next year will bring the Irish economy back on track.

But while recent job losses will lead to a rise in unemployment here, from its all-time low of 4%, economists are not anticipating a return to the double digit unemployment figures suffered in the 1970s and 80s.

'Reasonable growth'

"Even if unemployment rises to 5-6%, it will still be lower than in the last 20 years," points out IIB's Austin Hughes.

"Public sector pay is set to go up and we have signed up for an extensive National Development Plan, so I expect that we still should have reasonable growth next year," he said.