Central Bank boosts 2017 growth forecast

This is the first upward revision since the Brexit vote...

Central Bank boosts 2017 growth forecast

centralbank.ie

The Central Bank has revised its growth forecast for the Irish economy - it's predicting GDP growth of 3.5% this year and 3.2% in 2018.

That's up from a previous forecast of 3.3% expansion this year and 3.0% next year. This is the first upward revision since the UK voted to leave the EU.

It notes that the "overall growth outlook remains relatively positive" while Brexit and the "changing international political and economic policymaking landscape," remain threats to Irish growth.

Average unemployment for the year is expected to be 6.4% - dropping to 5.6% in 2018.

Chief Economist Gabriel Fagan said: "The evidence points to an economy which continues to grow at a healthy pace, supported by strong domestic spending and activity data.

"We expect that growth in 2017 and 2018 will come from the projected growth in domestic demand, reflected in solid growth in consumer spending and underlying investment. This is supported by strong growth in employment, which grew in 2016 at the fastest rate in almost a decade."

He also highlighted the factors which could affect Irish growth: "Risks continue to be on the downside, with the outlook characterised by uncertainty about the external environment, both in relation to Brexit and the changing political and economic policymaking landscape.

"To date, the impact of Brexit has been mainly experienced through currency depreciation, however, those sectors with a high dependency on exports to the UK remain exposed to any future adverse UK economic developments and also the threat of new barriers to trade. In relation to global risk factors, any increase in protectionism is sure to post a challenge for Irish resident exporters, especially in the multinational sector."