All about business

Irish Prime Minister Brian Cowen said the economy may shrink as much as 6.5 percent this year, cutting a forecast issued less than two months ago.

“It was said in January it would be about 4 percent,” Cowen said in the parliament in Dublin today. The “indications are now it could well be 6 or 6.5 percent,” which would be more than twice as much as the 16-nation euro area.

The government will announce an emergency budget on April 7 to try to curb a swelling deficit as the economy slides deeper into a recession. Irish Central Bank Governor John Hurley said yesterday that the economy will probably shrink more than 6 percent this year and that the risks “remain to the downside instant payday loan.”

Cowen is seeking as much as 4.5 billion euros ($5.7 billion) in savings in the budget next month and he said today there would be “no easy options.”

As companies from builders to banks cut jobs, the prime minister has forecast that unemployment claims may soar almost 30 percent this year. Claims are already at a record high of 354,437, according to statistics office data.

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