BOTH IRELAND AND BRITAIN face the most difficult economic conditions since the dotcom bubble burst, according to the Financial Times. Leading economists indicate deepening pessimism about the impact of the global credit squeeze. In the current climate, financial authorities have much less latitude to mitigate any downturn. The Irish government has already given away some discretionary tax cuts. Home prices are sliding throughout Ireland, correctly around a rate of 1% a month. The housing slump mirrors the same situation in the United States. And if a recession kicks off in the USA, Ireland will get hit by all the ill wind.
One thing that could help Ireland is the rate of inflation because there's a lot of padding in the cost of goods and services throughout the Republic. Simply put, everything costs more than you would expect in most European capitals. Take those costs of living alongside the stifling cost of owning a home in Dublin and you could see why some entrepreneurs in Ireland don't feel like they're getting ahead, even after several years of hard work.
Chris Giles -- "Outlook worst since dotcom bust" in The Financial Times, 2 January 2008.