Housing drags Irish economy down

Published:  29 January, 2010

DUBLIN: Ireland's economy will contract by 0.5% this year but return to growth by the fourth quarter, according to an Ulster Bank report.

The report said that house building would remain a substantial drag on growth during 2010, with housing completions forecast to fall to about 10 000 this year.

This compares to 26 800 in 2009. Prices will also fall, the bank said, predicting drops of as much as 45-50% from the peak three years ago.

Ulster Bank said if the international recovery is sustained, the Irish economy could grow as much as 3% in 2011.

The banks revised estimates are more optimistic than previous forecasts although growth in gross national product would be weaker, the bank said, contracting 1.2% but more positive than previous forecasts of -3.2%.

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