Ireland's unemployment rate rose to a 13-year high of 12 percent in the second quarter and would have risen higher without the safety valve of sharply stronger emigration, data showed on Tuesday. Improving indicators from consumer prices to retail sales have encouraged officials to say western Europe's worst performing economy would soon be past its worst, but analysts said the jobs market would need more time to recover.
"If unemployment is being limited just by rising emigration it's not exactly what you want to see," said Davy Chief Economist Rossa White, who sees recession bottoming out in the first quarter of 2010 and joblessness peaking six month later.
The second quarter unemployment rate compared with 10.2 percent in the first three months of the year and 5.7 percent a year earlier. The second quarter figures are at levels last seen in 1996, around the start of the now defunct 'Celtic Tiger' boom, the Central Statistics Office said on Tuesday.
The seasonally adjusted rate of unemployment rose to 11.6 percent from 10.1 percent in the previous quarter. Economists polled by Reuters this month projected unemployment to rise to almost 14 percent by the end of 2009 and 15.45 percent next year.
Earlier this year Prime Minister Brian Cowen predicted an increase in 2009 of as much as 15.5 percent and Finance Minister Brian Lehihan said with figures ahead of projections, it signalled a bottoming out of the economy. "Unemployment has not risen as much as we projected it would and that's another clear sign that the economy is bottoming out," Lenihan told a news conference.
White said he now expected unemployment to peak below 14 percent as foreigners increasingly leave the country rather than signing on the dole. The estimated number of emigrants from Ireland increased by over 40 percent to 65,100 in the year to April, the CSO said, resulting in the first net outward migration since 1995.
"Things are going to get worse before they get better," Bloxham Chief Economist Alan McQuaid said. "However, despite the likelihood that unemployment will continue to rise over the next twelve months or so, we think the rate of increase in the numbers out of work will start to moderate over the coming quarters."
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