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Think-tank: no rise in employment

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The modest economic recovery will not lead to a rise in employment

The modest economic recovery will not lead to a rise in employment

The modest economic recovery will not lead to a rise in employment

A leading think-tank has bleakly predicted the number of people in work will not grow next year despite modest economic recovery.

The Economic and Social Research Institute (Esri) said the unemployment rate will dip slightly to 13% in large part due to an estimated 100,000 people leaving the country between 2009 and 2011.

Although experts expect the recession-battered economy to grow by 2.5%, employment will be stagnant with almost 1.9 million people on average with jobs in both 2010 and 2011.

The Esri said: "This expected fall in the rate of unemployment is related to expected migratory outflows - 60,000 in the year ending April 2010 and 40,000 in the year ending April 2011. We also expect to see ongoing falls in labour force participation."

The Central Bank last week warned it will be next year before the economy is growing strongly enough to create jobs.

The bank said the projected upturn, based on a gradual recovery in exports and a moderation in the rate of decline in domestic demand, would only see new jobs several months later.

The Esri said the economy will contract by half a percent this year, with growth in 2011 driven by a strong export recovery, forecast to grow by 4.5%.

The quarterly economic commentary predicts Ireland will regain some of the competitiveness it lost in the run-up to the recession.

The think-tank said it maintains its belief that the economy can experience growth rates of 5% in the coming years, but warned there were too many obstacles standing in the way next year.

"These obstacles include the ongoing difficulties in the banking system which make it difficult to be optimistic about the capacity of the banking system to play an early role in facilitating the return to strong growth," the Esri said.

PA