ESRI Prognosis Show Failed Policies

The latest ESRI Quarterly Report makes frightening reading. It claims that Ireland is entering a depression that is worse than any industrialised country experienced since the 1930s.

The economy is due to shrink by 9.2 percent – which is of the same magnitude as the US experienced after the Wall St Crash of 1929.

Unemployment is set to rise so that almost one in five workers will be without a job.

In its Quarterly Report of last Winter, the ESRI predicted that the economy would shrink by 4.1 percent – just half of their current prediction.

The obvious question is: why is the prognosis getting worse? Why is the Irish economy going down much faster than any mainstream economist thought?

The ESRI cannot answer this question because it is locked into the conventional wisdom of the Irish economic establishment.

It concludes its report by advocating more wage cuts and more cuts in public spending to make Ireland ‘competitive’.

But it is precisely the wage cuts which have made the recession deeper.

No country in history has recovered from an economic depression through wages cuts and cuts in public spending.

The revision downwards of the ESRI’s prediction shows that a downward spiral in underway because of wage cuts.

It is time to stop bailing out the banks and fund a public works programme.

See People Before Profit’s "Alternative Economic Agenda" Document under campaign’s on our front page