120,000 FACING JOB AXE IN 2009; CREDIT CRUNCH CRISIS Cowen's economic plan branded a shambles.
THE economy was hit with a double Doomsday forecast yesterday as economists warned 120,000 people will lose their jobs next year and another 50,000 will emigrate.
Shocking new figures underlined the gloomy predictions from the state's Economic and Social Research Institute.
Official CSO statistics confirmed the Irish economy shrank by five per cent in the 12 months to September.
This is the most dramatic downturn in economic activity since records began - and economists predict another five per cent contraction next year.
The CSO figures show the building and construction sector was down overall by 18.4 per cent - with a contraction of 33 per cent in new housing.
The figures also show that investment overall was down by almost 15 per cent during the year.
However, the manufacturing sector bucked the trend in the economy, with output up by 4.3 per cent as a result of a strong performance by multinational companies based here.
But there was further bad news for Irish exporters yesterday when the euro hit an all-time high against sterling.
It exceeded 95p, hurting Irish businesses selling into Britain and causing further trouble for Irish retailers - already experiencing the worst sales in 25 years - because it will push more shoppers north.
ESRI economists yesterday urged the Government to scrap pay hikes agreed under the new national wage agreement saying the state could not afford the rises.
They said wages in the public sector will remain static while private sector workers will have to take a pay cut to hold onto their jobs.
And they added the economy must be ready to take advantage of any forthcoming global upturn.
The ESRI said: "The possibility of pay cuts in the public sector should at least be considered in this context as pay cuts may well be considered preferable to cuts in services.
"The pay adjustment approach could well yield expenditure savings more rapidly than an approach based solely on job cuts through natural wastage, early retirements and redundancy schemes."
Public sector will remain static while private sector must take pay cuts to hold on to their jobs
50,000 will emigrate next year
5% economy sank in one year
95p What euro is worth against pound
18.4% drop in building & construction
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|Publication:||The Mirror (London, England)|
|Date:||Dec 19, 2008|
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