Ireland expects economic rebound to start this year

(DUBLIN) - Ireland's debt-stricken economy will start to rebound this year after three years of recession, Finance Minister Michael Noonan said Tuesday as he announced a series of job creation initiatives.

"The economy has seen three successive years of declining economic activity. Between 2007 and 2010 the volume of goods and services produced in Ireland fell by 12 percent," Noonan told parliament.

"This year we can look forward to positive growth which we fully expect to accelerate as we move into 2012 and beyond."

The finance ministry outlook is for a strong export performance to translate into GDP growth of around 0.75 percent this year and 2.5 percent in 2012.

The ministry is forecasting average GDP growth of 3 percent a year from 2013 to 2015.

"Underpinning this expected rebound in economic activity is a strong outlook for goods and services exports. Indeed, the picture emerging is of an export-led recovery," Noonan said.

"The exporting sectors of the economy are generally performing very well. Last year, exports increased by 9.5 percent in real terms, the strongest growth rate for a decade."

A return to growth would be welcome relief for the debt-laden Irish economy, which was saved by a huge international bailout late last year.

It contracted by 1.0 percent in 2010, after it plummeted by a record 7.6 percent in 2009 when the full extent of the problems in the one-time 'Celtic Tiger' became clear. In 2008, GDP shrank by 3.5 percent.

Turning to Ireland's controversial 12.5 percent corporation tax rate, Noonan said it was an integral part of the government's strategy to encourage growth, to attract investment and to increase employment.

"Let me be absolutely clear on this issue: our 12.5 percent rate of corporation tax is here to stay. It is central to our industrial policy and is an integral part of our international brand.

"The government's message, therefore, is unequivocal. I can assure the house that there will be no deviation from that position," Noonan said.

Ireland is seeking a cut in the average interest rate of 5.8 percent on the EU-International Monetary Fund rescue package it was forced to accept last November.

EU partners initially pushed Ireland to raise its controversial corporation tax rate in stormy exchanges that culminated in a eurozone summit clash between Irish premier Enda Kenny and French President Nicolas Sarkozy shortly after Kenny took power.