Investec analysts cut Irish growth forecast

It says 2016 has been a "year of two halves" for the Irish economy...

Investec analysts cut Irish growth forecast

Photocall Ireland

Investec Ireland has described 2016 as a "year of two halves" for the Irish economy.

It notes that the pace of economic expansion fell sharply following the UK's decision to leave the European Union.

However - it adds that "high frequency data suggest that the worst of the pressure has passed" as the economy has weathered the initial Brexit storm. It highlights upswings in manufacturing and service PMIs and an increase in activity in the construction industry.

Strong domestic demand is fueling growth while the impact that external factors such as Brexit and Trump's victory in the US will have remains unclear.

Investec had downgraded its growth forecast for the Irish economy to 3.4% for 2017 and 3.2% in 2018 - "Despite these downgrades, Ireland is still on course to outperform most of its European peers," the note continued.

The comment from Philip O’Sullivan and Ronan Dunphy added that it previously predicted that Ireland's Government would not last until the end of 2016.

"Our sense is that the parliamentary arithmetic still counts against this administration’s longevity. However, any fresh election would be unlikely to result in meaningful policy changes," the noted concluded.