Money Ireland

Irish Economy: The Central Bank said today that the Irish economy is undergoing a modest recovery this year following an exceptionally deep and protracted decline in the previous two years. It forecast today an increase in GDP (gross domestic product) of about 0.8 % this year and a decline of about 1.0 % in GNP followed by growth in the range of 2.2 to 2.8 % in both measures in 2011.

Eurozone (EA16) annual inflation is expected to be 1.7% in July 2010 according to a flash estimate issued by Eurostat, the statistical office of the European Union. It was 1.4% in June. Meanwhile,  the Eurozone  unemployment rate was stable at 10.0% in June 2010. Austria was at 3.9%, the Netherlands at 4.4% and Ireland was at 13.3%.

Markets news on stocks, currencies and commodities; The IMF (International Monetary Fund) says the U.S. financial system is “slowly recovering,” but remains vulnerable to crisis, in part because Congress and the administration have failed to streamline a regulatory system marked by turf battles and overlapping responsibilities. The fund said additional capital of $76.3bn may be required. A separate report says additional stimulus measures may be needed to boost the economy.

German retail sales in June were in nominal terms down 1.1% and in real terms fell 0.9% on May 2010 while the rise in earnings subject to collective bargaining slowed.

Principal news stories from the Irish Independent, Irish Times, Irish Examiner, Financial Times and New York Times.

According to the estimates of the 19 Euroconstruct institutes, of which the Ifo Institute, at the University of Munich, is the German representative, the fall expected for 2010 will amount to about 4%. Accordingly, from 2008 to 2010, the extent of construction measures will fall by about 15% to ca. €1.26 trn (in 2009 prices). Construction volume increased in only two Euroconstruct countries in 2009 – - in Poland and Switzerland. In the other 17 member countries, developments were quite mixed. Whereas the decline was quite moderate in Germany, for example, Ireland and Spain reported dramatic drops.

Japan’s seasonally adjusted Nomura/JMMA Purchasing Managers’ Index (PMI) remained above the neutral 50.0 threshold in July, pointing to a further improvement of operating conditions in the Japanese manufacturing sector. However, the index fell to a four-month low of 52.8, from 53.9 in June, to signal that the rate of improvement was only modest.  Japan’s unemployment unexpectedly rose for a fourth straight month and industrial production in June fell the most in more than a year, signalling a slowing in the economic expansion.

The English dramatist Micheál Mac Liammóir (1899-1978; born Alfred Willmore) who with his life partner, Hilton Edwards, founded Dublin’s Gate Theatre in 1928, is reputed to have said that America was a country you cannot tell a lie about. In 1983, the late Harvard political scientist Samuel Huntingdon wrote of the 1960s student radicals who he saw as part of a recurring tradition of American puritans, enraged that American institutions didn’t live up to the country’s founding principles:  “[They] say that America is a lie because its reality falls so far short of its ideals. They are wrong. America is not a lie; it is a disappointment. But it can be a disappointment only because it is also a hope.”

China’s skillful response to the global financial crisis has blunted the worst of the downturn, but IMF economists say trade and current account surpluses must be prevented from reasserting themselves as the global economy recovers and China’s stimulus is withdrawn.

Markets news on stocks, currencies and commodities; US weekly jobless claims
fall slightly; Las Vegas is the foreclosure capital of the nation
with one filing for every 15 households.

Irish average national house prices in Ireland fell by 1.7% in Q2 2010 according to the Permanent TSB / ESRI House Price Index Quarterly Review published today. This is the lowest quarterly reduction since the second Quarter of 2008 [April – June inclusive] and compares to a reduction in Quarter 1 this year of 4.8% and a reduction of 3.9% in Quarter 2 of last year [2009]. The fall in average national house prices in the first six months (H1) of this year was 6.4%. The average price is at the 2001 level.

Eurozone retail sales rose at fastest rate in over two years in July as the latest retail PMI (Purchasing Managers’ Index) data from Markit, signalled that sales rose for the second month running in July. The seasonally adjusted Eurozone Retail PMI – -  tracking monthly changes in the value of sales at retailers – -  remained above the no-change mark of 50.0, rising from June’s 50.4 (revised up from 49.7) to 52.4. The latest figure signalled the sharpest increase in sales since May 2008 (when sales received a boost from the timing of Easter). It was also the first back-to-back increase in sales since September 2007. However, the upward momentum was weather-related, while retailers remained uncertain in their outlook.

Markets news on stocks, currencies and commodities; The German economy added 32,000 workers in June and employment rose for the fifth consecutive month.

Principal news stories from the Irish Independent, Irish Times, Irish Examiner, Financial Times and New York Times.

The International Air Transport Association (IATA) announced
on Wednesday that international
scheduled traffic statistics for June which showed continued strong demand
growth as the industry recovers from the impact of the global financial crisis.
Compared to June 2009, international passenger demand was up 11.9% while
international scheduled freight traffic showed a 26.5% improvement.

The Federal Reserve’s Beige Book report issued Wednesday, said that US economic activity was modest in June and the first half of July, one of several recent signs that the recovery may be running out of steam.

Rising sea temperatures over 100 years is harming the tiny plant life that forms the base of the oceans’ food chain as well as affecting the diversity of marine life, two new studies have found.

Markets news on stocks, currencies and oil; Italy’s Intesa Sanpaolo said today it is reviewing the books of Bank Zachodni WBK and the head of the Polish bank said there had been four meetings with potential buyers discussing the sale of Allied Irish Bank’s stake.

The Irish State agency, the Dublin Docklands Development Authority (DDDA), which has incurred huge losses from its part-ownership of the former Irish Glass Bottle site in Ringsend, South Dublin, cut its deficit in 2009 to €19m in 2009 from €213m in 2008. The agency is left with 34 Council/Executive Board members, 27 staff and interest accruing on its debt from its ill-fated 2006 property adventure.

New orders for US manufactured durable goods -  – items expected to last at least 3 years – -  in June fell  $2.0bn or 1.0% to $190.5bn, the US Census Bureau announced today. This was the second straight monthly decline and followed a 0.8% May decrease. Excluding transportation, new orders decreased 0.6%. Excluding defense, new orders decreased 0.7%. Transportation equipment, down four of the last five months, had the largest decrease, $1.1bn or 2.4% to $45.9bn. This was due to nondefense aircraft and parts, which decreased $1.8bn.

European bank shares were boosted Tuesday by strong earning results, revised Basel rules and the flawed European stress-test results, which were released last Friday.

Irish manufacturing prices fell by 0.4% in June 2010 because of the weaker US dollar versus the euro -  – changes in the dollar rate are crucial because Irish manufacturing is dominated by US-owned firms.

On  January 1, 2010, the population of the EU27 was estimated at 501.1m, compared with 499.7m on 1 January 2009. The population of the EU27 grew by 1.4m in 2009, an annual rate of 2.7 per 1000 inhabitants, due to a natural increase of 0.5m (+1.0%) and net migration of 0.9m (+1.7%). The highest birth rates were in Ireland, UK and France and the lowest were in Germany and Austria.

The US Conference Board Consumer Confidence Index which had declined sharply in June, fell again in July. The Index now stands at 50.4 (1985=100), down from 54.3 in June. The Present Situation Index decreased to 26.1 from 26.8. The Expectations Index declined to 66.6 from 72.7 last month.

Online advertising expenditure for 2009 reached €97.2 million according to the first IAB Ireland and PricewaterhouseCoopers (PwC) adspend study. This claimed ’strong performance’ was recorded despite a particularly challenging economic outlook and its devastating effect on the general advertising industry. The total Irish advertising market is estimated to have been worth €940 million in 2009.