The Irish economy is undergoing a very large contraction this year. The major source of the decline is the contraction in domestically-orientated activities. It is true that exports are also falling – but it is important to put that into a global context. The graph below shows projected export growth for 2009 for a range of countries (OECD projections, except Ireland where it is last week’s Central Bank forecast). In a cross-country comparative context, the global trade shock is bigger for many other countries. (However, a given decline in export growth has a bigger impact here than in many of these countries, in view of our high export share in output.) One reason is that we do not produce the types of durables and capital goods that have taken the biggest hit in terms of cancelled orders and so on.