- guardian.co.uk, Wednesday 29 April 2009 17.26 BST
The number of people claiming unemployment benefit in Ireland rose to 11.4%, according to figures today, as a leading thinktank said the country's once-booming economy was contracting faster than any other in the developed world.
A record 388,600 people are claiming jobseekers' benefit in the republic, the central statistical office said, after a seasonally adjusted total of 15,800 became eligible this month.
The number of people on Ireland's Live Register – a measure of claimants and unsecured workers such as part-time staff – has almost doubled over the past year, rising by 96%, as the Irish labour market has been hit hard by the collapse of the property and construction sectors, the global financial crisis and an unfavourable sterling-euro exchange rate.
Although the rise for April was slightly less than in March, a report by the Economic and Social Research Institute (ESRI) said that unemployment would rise by 17% next year.
It added that Irish GDP would fall by 8.3% this year and 1.1% in 2010 as the country experienced the biggest economic contraction in an industrialised nation since the 1930s. The Irish government would lose a further €1.3bn in tax revenue as a result.
Alan Barrett of ESRI said: "It is possible that places like Zimbabwe have bigger contractions, but you know when you're in trouble when you're saying at least we're not Zimbabwe. You're talking about the biggest contraction in an industrialised country since the Great Depression."
Barrett said that thanks to years of huge growth in the Celtic Tiger of the late 1990s, Ireland's average economic growth for the last decade will be about 4%.
Even though there has been talk of "green shoots" elsewhere, he warned that they may not bear fruit in Ireland for several years. "I guess we're all becoming mini-experts on the Great Depression. One of the things that I was not aware of about the Great Depression was that there were a series of false starts in the 1930s, around 1936 ... again green shoots appeared at some times in the 1930s, but they then went."
Barrett warned that high unemployment could continue well into any recovery, as the jobless rate remained at 15% in the early 1990s following the last recession, in the 1980s.
House prices, the ESRI said, will fall by a third from their peak during the housing boom of 2007. Irish government debt will rise from 41% of the republic's GDP to 58% in 2009, and 70% next year.
Ireland's Labour party said that if the ESRI projections were accurate, the country was on course to return to the era of mass unemployment that blighted the 1980s. Finance spokeswoman Joan Burton said: "We could see unemployment breaching even this level by the end of next year, recalling our worst memories of the 1980s.
"Unemployment is cutting a swath of social destruction across the country. Every community and every sector of the economy has been affected. Every family knows somebody who has lost a job. Some families have lost two incomes, making ends meet [is] next to impossible."
Burton said the recent emergency budget by Brian Cowen's administration did nothing to stem the alarming job losses and he called on the Irish government to introduce a national jobs plan.
