Time will heal recessionary ills, says economist
Marketing guru Martin Thomas, speaking at the Marketing Institute's 30th National Marketing Conference, which was held yesterday at the Four Seasons Hotel, Dublin yesterday.
Thursday November 05 2009
THIS week's 18-month high in consumer confidence "doesn't mean much" for the prospects of Ireland's recovery, economist Dan O'Brien warned yesterday.
Addressing the Marketing Institute's annual conference, Mr O'Brien said consumer sentiment and retail sales have been "going in exactly the opposite direction" since the beginning of the year.
"Consumer sentiment hasn't been a good predictor of hard data," he stressed, just days after a KBC/ESRI index put consumer sentiment at its highest level since April 2008, sparking hopes of recovery.
A senior figure at The Economist Intelligence Unit, Mr O'Brien has been one of the more downbeat commentators on Ireland's prospects, giving the country a 15pc chance of going bankrupt after speaking at an event in May. Yesterday, he began his address on a more positive note, stating that the "worst appears to have passed" in the economic crisis, with a "bottom" in sight in 2010.
Investment
Mr O'Brien also praised Ireland's "positives in the medium and long term", including an ability to attract foreign direct investment, strong services exports that would be buoyed by global recovery and a good labour force.
He added, however, that Ireland's recession was the "most difficult type of recession to get out of".
"There, banks will be a drag, there's no magic wand and it'll take time," he said.
"Credit conditions are not going to be tight just this year and next year but for a considerable period of time."
Asked about the likely success of the Government's chosen way to rehabilitate the financial sector -- the National Asset Management Agency (Nama) -- Mr O'Brien said there was a "very small evidence base to go on".
"I don't think anybody knows whether it will work," he added.
"It could be that by this time next year most of the financial system ends up being nationalised anyway."
Mr O'Brien was speaking after RTE-economist-turned-Fine-Gael-TD George Lee, who told the marketing delegates their "creative ideas" were needed to help get the country back on track.
- Laura Noonan
Irish Independent
