Ireland’s finance minister has downgraded the country’s growth forecasts for the second time in a month and outlined new tax cuts as he warned that the Eurozone crisis could hurt the country’s recovery from bankruptcy.
Michael Noonan cut his outlook for GDP growth to 1.3 per cent from 1.6 per cent, as the risk of a Eurozone recession hits its prospects for export growth and keeps Irish consumers locked in a protracted downturn.
Noonan said putting Ireland’s finances back on a sustainable footing was of critical importance and set out another €1bn of tax rises on top of the €2.2bn announced in the budget last week.
“If the Eurozone crisis recedes, we are amongst the best placed to grow quickly, as evidenced by the EU Commission's growth forecasts. If the Eurozone crisis persists, it is equally important for the state to reduce our dependence on borrowing,” he said.
Standard & Poor's said yesterday it was likely to cut Ireland's credit rating as part of a downgrade of 15 of the bloc’s 17 countries, leaving it one level above junk status, if Europe does not deal with its financial problems.