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    High unemployment suggests lower emigration, says BOI

    By Noreen Bowden | April 11, 2011

    The Bank of Ireland has revised its economic forecast to reflect a gloomier situation than it had previously predicated.

    The Bank’s latest quarterly economic outlook says that the economy will grow by 0.5% in 2011, down from the 1.5% growth rate it had previously predicted.

    The Irish Examiner reports this downward revision comes following the emergence of what the BOI report described as “two surprising and unwelcome” economic trends:

    “The first was that the unemployment rate over the past six months has been much higher than previously published, on the basis that the labour force stopped falling in the final quarter of 2010,” commented Bank of Ireland chief economist Dan McLaughlin, author of the report.

    The bank said that this implies that the scale of net emigration “is much lower than previously thought”.

    The unemployment rate in 2011 is now expected to average 14.4% from 13.6% last year, although it has probably peaked in recent months, BOI said.

    The second factor in the revised prediction was that nominal GDP fell by “a massive 6.6% in just three months”, with falling exports resulting in a decline in real GDP of 1.6%.
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