The figures will be of little comfort to those homeowners who paid high prices during the boom that saw modest three-bedroom houses in Dublin selling at £1m.
The tests for commercial property also look bad for those trying to fill empty office space around Dublin and beyond. In the best case, the central bank is forecasting a 2.5% drop this year, but a massive 22% drop if the economy deteriorates further. The tests are being conducted by Blackrock Solutions and are designed to reveal the full potential losses at four Irish banks: Allied Irish, Bank of Ireland, Irish Life & Permanent and the EBS Building Society.
"Given what is going on in the world, with Japan and Bahrain, there could be a slowdown in global growth and Ireland is an open economy and hugely dependent on the international markets for exports. There is no growth at all on the domestic side and exports would be hit by a global deterioration," said Alan McQuaid, chief economist at Bloxham Stockbrokers.Speculation has been rife that the test results will reveal a further black hole in Irish banks and lead to calls for a second bailout when they are published on 31 March. Some €35bn (£30bn) has already been earmarked under the IMF-EU assistance programme, but some leading banking figures predict another €15bn will be needed.
Blackrock looked at 15 key economic indicators including GDP growth, unemployment, investment, consumption and inflation. The best outlook is that GDP will grow 0.9% this year, but the worst is that it will shrink by 1.6% this year before moving back into a positive figure of 0.3% in 2012.
"I think they are right to err the risk on the downside instead of the upside," he added.Speculation has been rife that the test results will reveal a further black hole in Irish banks and lead to calls for a second bailout when they are published on 31 March. Some €35bn (£30bn) has already been earmarked under the IMF-EU assistance programme, but some leading banking figures predict another €15bn will be needed.
Blackrock looked at 15 key economic indicators including GDP growth, unemployment, investment, consumption and inflation. The best outlook is that GDP will grow 0.9% this year, but the worst is that it will shrink by 1.6% this year before moving back into a positive figure of 0.3% in 2012 , source www.guardian.co.uk For the latest updates on the stock market, visit Stock Market Today
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