Economist Predicts No Growth For Ireland's Economy

The Celtic Tiger may have come to an official end according to an Irish economist.

Dr Alan Ahearne, a professor at NUI Galway, made the assertion at the annual investment conference of the Irish Association of Pension Funds.

Dr Ahearne said there was very little to justify forecasts of growth in the Irish economy such as that of the Lloyds TSB forecast, which suggested growth of four per cent. The professor also said a housing slump would wipe four percentage points off the annual growth rate and that official figures had underestimated a fall of 10-15 per cent last year and this year in house prices.

Despite the fall in house prices, Mr Aherne said there was little hope of an interest cut from the ECB.

However, offering some advice he recommended that Irish exporters should look to the Asian markets due to their current low valued currencies, and speculated the American dollar would continue to fall, which could be an excellent opportunity for European economies.

There is a ground swell of opinion however, is that the dollar will have a resurgence by the end of the year, according to Bank of Ireland Economist Dr Dan McLaughlin. He said there was a "policy vacuum" surrounding the currency, and that this posed risks to investors and exporters.

Dr McLaughlin said policy makers on both sides of the Atlantic seemed worryingly unconcerned about the value of the US currency, which he believes is facing a 30 per cent overvaluation against the euro.

(DW/JM)