MICHAEL McALEER:The figures speak for themselves. Irish economic growth is set to decelerate from 5.3 per cent in 2007 to 1.8 per cent this year, according to the International Monetary Fund (IMF). Other, less optimistic, economists are predicting growth rates of 1.5 per cent.
The annual rate of consumer price inflation accelerated to 5 per cent in March. The Live Register added an extra 12,000 people last month, bringing the unemployment rate to 5.5 per cent, the highest since August 1999.
Those are the Irish figures. The outlook in America looks even bleaker. Earlier this month, Ben Bernanke, chairman of the Federal Reserve, admitted for the first time that a "recession is possible". His predecessor, Alan Greenspan, was more candid: "The chances that we'll have [ a recession] are more than 50 per cent." Going even further, billionaire investor George Soros called the current financial crisis the worst since the Great Depression.
While other major European economies are weathering the storm better, the impact of a US recession for Ireland is pretty obvious. It is the most significant source of the foreign direct investment and a driver of our economic modernisation.
The post-mortems are already underway and blame for the latest downturn is being assigned - mostly to the banking world.
However, for all the warnings of imminent economic gloom, there are accompanying qualifiers that this is just part of the general cyclical economic environment.
As Michael Casey, a former board member of the IMF, writes in this edition (page 18): "Like marathon runners, economies actually need to slow down periodically, to take a breather. A growth recession is like a reality check; it brings us back down to earth and we adjust our behaviour accordingly."
That adjustment must not mean cuts in either research or innovation budgets. It might seem an ideal short-term solution, but the consequences can be detrimental when the economy picks up again.
As Intel chairman Craig Barrett states (page 36): "Trying to save your way out of a recession makes no sense. You invest your way out of a recession.
"What you want to make sure you do in a slowdown is continue your investment stream in R&D and new products. . . so that when the business does turn around, you have a strong base to build off."
