My Department is keeping developments in the world economy generally, and those as a consequence of the difficulties in the Middle East in particular, under ongoing review. The prospective outlook for the world economy was factored into the budget day forecasts for the Irish economy. On budget day I specifically referred to the difficulties in the Middle East as one of the more obvious significant downside risks to those economic projections.
The main channels through which a war in Iraq could affect the Irish economy are through an increase in oil prices and a reduction in global economic growth. As Ireland is a small open economy, which is highly integrated into the global economy through its trade and investment links, a slow-down in world growth would obviously affect our growth prospects.