Professor John McHale:

It certainly will not help and it is a further effect of fiscal adjustment measures, but if we compare the last quarter in 2011 to the last quarter in 2012 domestic demand was largely stable.

If the international economy had continued to perform it as it had been performing until last year we would now be moving into quite solid growth and the growth projections to 2014 and 2015 would look very reasonable. It shows the level of uncertainties which exist. We cannot control the international economies. There are real questions about some of the policies being pursued, particularly in the eurozone, which are certainly not helping the situation in terms of the growth of the eurozone economy. We will have to see what will happen in Europe and whether the recent comments by President Barroso signal a softening of policies which may provide a positive boost to eurozone growth. In terms of the recent forecast of a stabilisation in domestic demand, which had been made in previous years also and was not well underpinned given what we could see happening with the balance sheet recession, there is more evidence now that this stabilisation is finally beginning to take place. If we could get a reasonable draw in terms of what happens in the international economy we should be able to return to reasonable growth, but these are big ifs.