The upbeat assessment of the economy's prospects contained in the Economic and Social Research Institute's Medium Term Review seems at odds with the current realities.
The almost daily announcement of job losses is hard to square with the ESRI's view of the economy as fundamentally sound. But, as its authors point out, the purpose of the exercise is to help the Government and other policy-makers lift their eyes beyond their immediate difficulties and take a longer-term view.
The vista that unfolds is not unappealing. The current difficulties do not signal the end of the the Irish success story, and many factors that underpinned the high growth of the last decade remain intact. As a consequence, the ESRI argues the economy could return to growth levels of five per cent within two years. Furthermore it could continue to enjoy them for the remainder of the decade. After that we would revert to the sort of growth levels typical of a mature developed economy. This may seem a modest enough prospect for a country where double digit growth was common in the recent past. But it is substantially better than anything our European peers can aspire to.
The manifestation of this "Benchmark" scenario is far from a given, however. The ESRI makes two significant assumptions in forming its view. The first is that the international economy - and the European economy in particular - recovers by 2005. The second is that the deterioration in the competitiveness of the Irish economy is arrested.
The first criterion is by and large beyond the control of the Government, but there are some grounds for optimism. A raft of major US companies reported second quarter earnings this week, many of them coming in ahead of forecast. And yesterday Germany's influential IFO institute predicted a recovery, possibly by year end.
The second of the ESRI's caveats falls squarely within the Government's bailiwick. And as yet not enough has been done to bring down, or at least contain, the costs of doing business here. Inflation remains the highest in the euro zone and the blame for a significant portion of this week's job losses has been laid at the door of high labour costs.
There also remains a significant deficit in the infrastructure on which business relies. So much so that the ESRI has called into question the Government's decision to prioritise the National Pension Reserve Fund over investment in roads, schools and hospitals. So far this year the Government has paid €552 million into the fund.
The ESRI devotes a considerable amount of its report to exploring the consequences for its forecasts of Irish goods and services not remaining competitive on world markets. Growth and employment would in that case fall significantly and living standards would be some 10 per cent lower than would be expected under the Benchmark scenario. The case for getting to grips with competitiveness has rarely been so starkly made.