'Recession over, long live recovery', says bullish Goodbody
The recession is officially over and even the Irish consumer is feeling more confident, Goodbody Stockbrokers said yesterday.
The Dublin-based stockbroker struck the most bullish tone about the Irish economy to date, claiming: "Recession over, long live the recovery."
The broker's chief economist Dermot O'Leary said while Central Statistics Office figures were awaited for the first quarter, the company was prepared to declare the recession over.
"We believe we have sufficient evidence to declare that the recession ended at the end of 2009 and that growth returned to the Irish economy at the beginning of 2010,'' Mr O'Leary said. Gross Domestic Product and Gross National Product data for the first quarter won't be released for another month, but Mr O'Leary said it would show a bounce and would be no "flash in the pan".
Goodbody upgraded its forecasts from negative for 2010 to a flat position in terms of GDP. The broker is expecting GDP and GNP growth of 3pc in 2011.
"Over the past two weeks in particular, there have been a number of indicators, as well as commentary from Irish corporates that together, indicate growth has re-emerged."
Mr O'Leary cautioned that major problems still lingered. "We must not get carried away with ourselves, as the challenges that the economy faces have not disappeared, but it is important to recognise that the turning point that we thought would arrive around the middle of the year has already arrived."
He cited PMI (Purchasing Managers' Index) data, retail sales and consumer confidence as support for his assertions. Consumer spending had stabilised, he said, but conceded that the car-scrappage scheme was playing a part.
Tax receipts were also showing improvements with the downward trends of 2009 moderating and VAT receipts expanding. "With expenditure coming in below target, and our belief that growth is re-emerging, the plan to stabilise the budget deficit is now ahead of target.''