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Despite the very real difficulties that are currently being encountered, the essential message of this Review is that the economy will eventually rebound, and return to its medium-term growth path. The analysis in the Review suggests that the Irish economy is resilient in the face of adverse circumstances. When we wrote the last Medium-Term Review in December 2005 we were more concerned that a misplaced sense of economic invincibility had taken hold in Ireland and we sought to draw attention to the very real dangers facing the economy at that time. Unfortunately, some of these problems have now come to pass (along with some we did not envisage). However, if properly managed the slowdown that is occurring in the economy today should pass and the economy should recover fully in the early years of the next decade.

While our understanding of the key factors driving the economy has evolved over recent years, our view of its likely medium-term growth rate has not. The forecast for the growth in GNP over the period 2007-2015 is identical to what it was when we published the last Review in December 2005, an average of around 3¾ a year. ¹ This expectation is based on a detailed examination of the potential growth in productivity and the likely development in the labour force. Our analysis suggests that, even if the current downturn were to be more severe than anticipated, the economy would eventually recover more vigorously to realise the medium-term growth rate. This resilience is crucially dependent on the assumption that appropriate policies are pursued.