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Latest gloomy growth forecast exacerbated by lack of action

IT is difficult not to stifle a yawn as yet another institution downgrades its economic forecasts, but the latest cuts from the European Commission are hard to ignore.

The commission suggests that it will be 2014 before we see growth in the Irish economy again that rivals the pitiful 1.4pc we saw last year.

As 2012 enters the final two months, there will be few people who wave goodbye to another difficult year with tears in their eyes, but the evidence suggests things won't pick up in 2013.

The strange thing is that neither the European Commission nor the other organisations busy downgrading their forecasts appear to accept the logic of what they are saying. Low growth means that it will be more difficult to meet the deficit targets in the years ahead but nobody seems to be saying this yet.

Yesterday's forecasts from the commission still show a gradual decline in the size of the budget deficit along the lines projected two years ago when everybody was much more gung-ho about the prospects for growth here and overseas.

Nobody now believes the economy will turn around soon but those deficit targets remain intact.

It will be interesting to see what the official medium-term forecasts have to say on the matter when the Department of Finance finally publishes its growth forecasts sometime this month.

Indo Business