Belfast Telegraph

Economic outlook 'better than many'

Long-term prospects for the Irish economy are now better than many other hard-hit European countries, a leading think-tank has claimed.

Forecasting growth of 1.2% this year - up from the zero estimate in May - the Paris-based Organisation for Economic Co-operation and Development (OECD) warned about the need for urgent bank reforms to deal with the mortgage arrears crisis.

About one in 10 households are behind in repayments with the bill for mass debt forgiveness put at 14 billion euro.

The influential body urged the Government to work harder on rescuing the economy through public sector efficiency, welfare reform and infrastructure projects.

Robert Ford, deputy director of the OECD country studies division, backed calls by the newly-created Fiscal Advisory Council to push for a quicker budget savings programme.

The five-man independent panel this week urged the Government to aim for four billion euro savings in the 2012 budget rather than the estimated 3.6 billion euro.

"Provided the economy continues to grow, Ireland should consider reducing the budget deficit faster than required by the programme, to help gain credibility in financial markets," he said.

The OECD suggested the Government now turn its attention to the jobs crisis to bring down the 14.2% unemployment rate and help the long-term unemployed back to work, while urging better policies to help jobseekers find jobs and welfare reform. It also called for a broadening of the tax base, including the introduction of property taxes.

Finance Minister Michael Noonan said the report was wide-ranging, timely and relevant, and some of its recommendations will feed into preparations for the budget.

"The OECD Survey acknowledges that, after succumbing to a deep recession and banking crisis, considerable fiscal efforts have been made since then and that a modest recovery is now under way in Ireland," he said.

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