Central Bank Governor Predicts Some Recovery By 2010

Governor of Ireland's Central Bank John Hurley has said that despite a bad 2009 there will be 'extended and gradual' economic recovery next year.

He said Ireland's economic recovery would take time and be gradual, but the benefits of the recovery will begin to be seen next year.

John Hurley, who launched the Central Bank and Financial Services Authority in the 1970s made the claim in the Authority's annual report on Friday.

However, Mr Hurley also said the bank was revising its 2008 growth forecasts downwards for Gross Domestic Product, which is the value of goods and services produced, saying the economy would grow, but at a rate of significantly less than 1%.

The housing sector would also experience a significant weakening in the housing sector, putting a dampener on growth for this year. The gross domestic product of 16 countries is expected to shrink by up to 5.1% this year, marking the continued global crisis.

Mr Hurley said the collapse of multi-national group Lehman Brothers last September had led to an extraordinarily difficult environment with global economies are witnessing shocks never experienced before.

Beyond next year Mr Hurley said economic growth should return to its potential rate of about 4%, but this recovery is not guaranteed. He said it depends on focusing on the public finances, the efficiency of of public spending, especially in relation to the productive capacity of the economy and overall competitiveness.

(DW/JM)