The economic news out of Ireland for the past six months or more has been uniformly bad - the property market collapse, factory closures, jobs vanishing to cheaper locations in Eastern Europe, unemployment figures climbing.

Part of the slide has to do with the international credit crisis, of course, and with external factors like the price of oil over which we have no control. But there was a feeling around as well that at least some of the downturn in Ireland was our own fault, caused by factors that were within our control.

We had the boom, it's over, and basically we blew it, the pessimists said. We did not spend the money wisely.

Instead of investing it in our future (on education, transport, broadband, etc.), we spent it on cappuccinos, cabriolets and consumer junk. Now there's an international slowdown and our economy is going down the toilet, and there's nothing we can do.

We're on the brink of a recession and it could drag on for five years, 10 years. Who knows how long?

That's what the doom and gloom experts have been saying here for some time now. The downturn here began for real last August and it has got worse in the meantime. All the predictions in recent weeks have been relentlessly gloomy.

Until last week, that is. Suddenly, like a ray of sunshine breaking through the dark clouds, last week there was some good news about the Irish economy for a change.

This came from the most respected economic research organization in Ireland, the Economic and Social Research Institute (ESRI), in a long term forecast on the future of the economy.

Far from joining in the end is nigh chorus, the ESRI was surprisingly positive. In a nutshell, what the ESRI said was that the present downturn in the Irish economy is a temporary pause. Pretty soon we should be back to an impressive level of growth again.

The ESRI forecast said that the Irish economy has the potential to grow at around 3.75% a year over the coming decade, despite the significant short-term problems we face. That is an annual growth rate that a lot of other countries could not reach even before the international financial problems started last year.

We are now such an open economy, so much a part of the globalized economy that we cannot avoid being affected by the international slowdown, the ESRI said. Exports now account for 47% of Irish output, in comparison with domestic spending which accounts for just 29%. So it's not surprising that a global downturn in demand is hitting us hard.

That's the bad news. But the good news is that we are in pole position to take off again in a new round of growth and prosperity when the global economy starts to move again. Once international demand climbs again, we will be off and running, leaving other countries behind once more.

The ESRI forecast predicts that when the current global economic slowdown ends, the Irish economy should recover quite rapidly, if we implement "the appropriate policies" in the intervening time.

Even if the current international slowdown proves to be more severe than anticipated, the Irish economy is resilient, the ESRI says. A global recovery would still see Ireland rebound strongly when it happens.

The ESRI growth forecast is based on the belief that the global economy - and particularly our major trading partners like the U.S., Britain and Europe - will see a turnaround in activity from 2010 onwards. They predict that the current credit crisis in the global economy that is now holding back business will be a short term situation, and that a return to growth in the developed economies will then resume, with Ireland leading the charge.

The ESRI says that after two difficult years this year and next, the Irish economy will bounce back in 2010 with a growth rate of over 5%.

Why is Ireland in such a fortunate position? The prospect of continuing medium-term growth above the EU average is underpinned by favorable trends in labor supply and in productivity, the ESRI says.

While unemployment is currently rising, with a flexible labor market there should be a return to full employment fairly quickly. Despite current difficulties in building and construction, the country will need continuing substantial investment in infrastructure and housing over the coming decade.

And there are other areas which in the future will be even more important, like exports of business and financial services. Structural policies, such as investment under the National Development Plan, will play a key role in bringing back substantial growth here, the ESRI says.

Developing good health care, an excellent education system and a clean environment will be increasingly important in making Ireland an attractive location to live and work, it says, in a strong hint to the government not to be afraid to borrow and invest heavily in infrastructure here.

If this forecast is correct, Ireland will be back to a 5.5% annual growth level in 2011. And there is no reason to think that it might be wrong.

The ESRI, which forecast the emergence of the Celtic Tiger in the first place, has an excellent record. It's a major, independent, state-backed research organization with some of the country's best economists.

But there is one caveat to all of this - and it is in that innocuous phrase in the ESRI report where it says that the Irish economy should recover quite rapidly if we implement "the appropriate policies" in the intervening time.

What that means, of course, is maintaining and improving our competitive position by moderating wage demands instead of chasing a temporary blip in inflation. It also means keeping a lid on government expenditure that has spiraled in recent years with little to show for it by way of improved services.

This is because much of the increased government expenditure has gone on increases in pay for state employees. No one is against that, if it is deserved. There had been a certain amount of catch-up necessary for workers like nurses and teachers, but that has now been achieved.

We have now reached a situation where state workers, with their guaranteed jobs and guaranteed pensions and good earnings, are the envy of many workers in the private sector who are at the mercy of competition from low cost countries in Eastern Europe.

The unions in the state sector are extremely strong, whereas in the private sector unions are a much weaker force these days than they used to be. This has resulted in state workers doing very well in recent years, continually demanding and getting increases in pay.

Many state workers are also able to retire at or before 60 on generous pensions which are index-linked to beat inflation, whereas in the private sector many companies now have pension schemes which are not guaranteed but linked to the performance of funds in the stock market.

And who pays for all this in the state sector? The private sector, of course, because ultimately that is where tax revenues have to come from. So it's no wonder that many private sector workers are feeling sore these days in relation to their state worker counterparts.

The next round of the National Pay Talks is now underway, and the attitude of the state worker unions at the negotiations will be a key factor in all of this. To encourage the unions to show some moderation, new Taoiseach (Prime Minister) Brian Cowen last week strongly hinted that the government may postpone the controversial pay increases for ministers that were due to be introduced.

If a reasonable national pay deal covering the next few years can be worked out, then Ireland will be poised for a return to sustained growth in the economy over the next 10 years. It won't be the Celtic Tiger again. But it will be a substantial growth with close to full employment.

So if any of you over there are thinking of coming back, given the difficult situation now for the undocumented in the U.S., then the prospects here should be much better in the future than the current gloomy headlines indicate.

A little good news for a change.