Ireland’s PM Brian Cowen today updated the Dail (lower house) on the still deteriorating state of the economy. One thing his remarks unintentionally highlighted is the problems that governments create for themselves when they are sitting on their internal economic projections which they treat as confidential but then still demand that everyone needs to contribute to the “debate” over how to mitigate the crisis. Anyway, the Opposition did coax him into revealing the GDP growth decline forecast for 2009 and he helpfully revealed the rate of downward revision —
It was said at budget time [October] it would be in the region of 2%, it was said in January it would be approximately 4% and the indications are now that it could be 6% or 6.5%.
So the revision is about minus 1 percentage point per month, which is probably on a par with former Baltic Tiger levels.  And senior policymakers still hint that the domestic banking system is a very fragile state. So those green shoots of recovery, ends of tunnels or whatever are not being sighted in Ireland yet.
Incidentally, Cowen also recently cited Canada as his preferred model for financial sector regulation.  Various things contribute to Canada’s relatively less severe manifestation of the crisis. The IMF helpfully points to one of them —
Complementing monetary policy, the floating exchange rate policy has also served Canada well, serving as a shock absorber. The recent depreciation of the exchange rate, which has occurred in line with the decline in commodities prices, will dampen disinflationary pressures and support activity.
Not an option that Ireland has.
I find it absolutely wrong that the Government keeps information to itself.
It is paid for entirely by taxpayers. It is accordingly their property. For the Government to keep anything to itself is for Government to try to exist for its own sake; and any argument that this information is kept secret “for the greater good” is just so much patronizing verbiage.
What makes the Government think is has the right to play the part of a parent to the several million independent adults who pay for its existance?
During the commodities boom, the Canadian Dollar skyrocketed against the US Dollar, putting severe strain on Canadian manufacturers and increasing cross-border shopping trips to the US.
For better and worse, Canada has little influence on its exchange rate.
Little influence in the sense that policy cannot do much to affect it, but the exchange rate does provide a buffer of adjustment that Eurozone countries don’t have. When Canada goes into recession, the C$ depreciates to offset some of the damage.