News

Ireland’s growth forecast cut as ‘economic outlook remains clouded by uncertainty’

The European Commission has revised downwards its GDP forecast for Ireland as our “economic outlook remains clouded by uncertainty”.

In its quarterly economic forecasts, the EU executive said that domestic economy is expected to expand at an average rate of 4pc this year and next.

The Commission cited “robust employment developments, stronger wage growth and weak inflation” as further supporting private consumption.

“However, the ongoing decline in consumer confidence, reflecting uncertainty about the economic outlook, suggests downside risks to consumer spending,” the forecast read.

Government supply measures are expected to encourage construction activity to expand at a brisk pace.

But estimated real GDP growth of 6.8pc fell well below autumn projections, reflecting weaker-than-expected growth in the third quarter.

“Influenced by the lower carry-over from 2018 and the less favourable outlook for global demand, Ireland’s GDP growth is forecast to moderate to 4.1pc in 2019 and 3.7pc in 2020,” the report said.

“The economic outlook remains clouded by uncertainty. This relates primarily to the terms of the UK’s withdrawal from the EU.

“As a highly open economy, Ireland is also particularly exposed to changes in the international taxation and trade environment. The huge impact of the often unpredictable activities of multinationals, could drive headline growth either up or down.”

Bigger picture

Ireland’s GDP growth forecast of 4.1pc in 2019 is joint second highest in the EU with Slovakia, and 3.7pc for 2020 while Malta is forecast to have the highest growth in 2019 at 5.2pc.

Estimates for the inflation in the 19-country currency bloc have also been revised downwards for 2019, with expectations that it will be lower than that forecast by the European Central Bank.

Back in November, Brussels said that the euro zone would grow 1.9pc in 2019 and 1.7pc next year.

However, now it is expected that growth will slow to 1.3pc this year up to 1.6pc in 2020.

All countries in European Union are expected to continue growing, but the larger member states will slow significantly.

Article Source: http://tinyurl.com/kbwqb42

Back to