Ireland gets gold star from Goldman Sachs

Another week, another honeyed commentary on the Irish economic recovery from an international commentator. This time the research was from the London offices of Goldman Sachs, who noted improving dynamics in Irish residential mortgage arrears and stated the National Asset Management Agency was "likely" to make a profit for the State by the time of its wind-up, which is currently slated for 2020.

On Thursday, Goldman's economics daily focused on Ireland. The team there suggested mortgage arrears have peaked and expect the Irish banks to come through the pan-European banks stress tests later this year without too much drama.

With unemployment falling and house prices rising again, Goldman suggested Ireland’s banking sector is “likely to benefit from significantly reduced provisioning requirements over time, with the potential for write-backs on some loans that had previously been written off”.

Here’s hoping.

On Nama, it said that due to the "significant improvement" in Ireland's residential and commercial real-estate markets in the past 18 months, Nama was likely to "ultimately turn a profit for the Irish Government over its lifetime".

Goldman said the negativity around Nama was always “overstated” and failed to account for the significant operations income generated by the agency’s assets – “around €1 billion to €1.5 billion per year to date”.

These are hardly startling revelations given the turnaround in sentiment towards Ireland over the past six months and the improvement in various economic indicators of late. However, Goldman’s view carries a certain weight given it predicted in late 2011 that we wouldn’t need a second bailout on completion of the EU-IMF programme. That was a full two years in advance of our exit.

We can only hope their forecasts this time around are equally accurate.