Ireland presents new budget April 7, recession worsens

Ireland’s budget shortfall soared to 2 billion euros in January-February, prompting Cowen earlier this month to call for another budget revision-the second since October-to keep the deficit at 9.5 percent of gross domestic product, the highest in the euro zone.

Cowen said the economy now looked likely to contract by 6-6.5 percent this year-much more than earlier estimates.

‘The cabinet met this morning. We would intend bringing that budget on April 7 to the house,’ Cowen told deputies on Wednesday.

‘That would enable the house to debate it for that Tuesday, Wednesday and Thursday.’

The bursting of a property bubble and global turmoil have battered the former ‘Celtic Tiger’s’ economy and the government had already warned Ireland faced its worst recession on record this year.

‘It was said at budget time it would be in the region of 2 percent. We said in January it would be about 4 percent,’ Cowen said, referring to the economic contraction.

‘The indications are now it could well be 6-6.5 percent. So that shows you the fragility of the economy,’ he said without giving further details.

Ireland’s central bank governor John Hurley said on Tuesday GDP was expected to shrink by over 6 percent this year, two percentage points more than earlier expected, with that forecast also under threat of revision.