Not too long ago, the Irish economy was the envy of much of the developed world. The country quickly developed a knowledge-based economy and saw high levels of growth for a number of years, thanks in large part to its ultra-low corporate tax rate which is at just 12.5%. Yet, the boom didn’t last and the country was hit especially hard by the financial crisis of 2008, becoming the first nation in the EU to officially fall into a recession. After a series of bank bailouts and a crash in the once-dynamic Irish property market, the national economy was pretty much devastated and it remains one of the most indebted countries in the world. With that being said, recent developments in the country suggest that maybe, Ireland is finally exiting its nearly three year slump.
Despite the severe challenges facing Ireland, the country has managed to slowly reduce its deficit as a percentage of GDP to a more manageable level. In fact, according to a recent report from the EU/IMF, the deficit is projected to come in below the target rate of 10.5% this and is well on track to reach the goal of 3% by 2015. Furthermore, the country is now expected to see its economy grow at 0.6% this year and 1.9% in 2012. While that might not sound like a lot, it does represent the first time since the crisis began that the Irish economy has seen growth, suggesting to some that the economy may have bottomed out for the time being [Highlighting The PIIGS ETFs].
Read Full Article »
