Stephen McNeice
Stephen McNeice

21.06 16 Apr 2019


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The Government has cut its economic growth forecast, citing a "challenging" external environment.

GDP is now expected to grow by 3.9% this year - down from the previous estimate of 4.2%.

Next year, a growth rate of 3.3% is expected, compared to the previous estimate of 3.6%.

A slowing of the pace of growth in key export markets is being blamed for revised estimates.

The figures have been highlighted in the Stability Programme Update (SPU) 2019, published by Finance Minister Paschal Donohoe today.

Despite the revised GDP forecasts, the minister insisted the economy remains in a strong position.

The country is said to be close to full employment, with an average unemployment rate of 5.4%.

The debt-to-GDP is projected to continue falling, while there's also been 'stronger-than-assumed' corporate tax revenue.

"We cannot be complacent"

Speaking about the figures, Minister Donohoe said: "Despite the less favourable external environment, the Irish economy remains in a strong position, and this is paying dividends in the labour market where an additional 50,000 jobs are expected to be added this year.

"We have also confirmed that the General Government Balance moved into surplus in 2018 for the first time since 2007. This reflects the hard work that has been undertaken and the right policies pursued to get us to this point."

He added: "We cannot be complacent, however, as there are serious risks on the horizon, not least of which is the nature and timing of the UK’s exit from the European Union.

"It is absolutely vital that we continue to build up our fiscal defenses, so that we can continue to support the economy, and provide for society, if, and when, these risks materialise."

Sinn Féin accused the Government of basing the update on "unrealistic projections of the public finances".

The party's finance spokesperson Pearse Doherty warned that Brexit threatens "tens of thousands" of jobs over the next decade, and also highlighted weakening global economic growth.

Deptuy Doherty argued: "In light of today’s update, the coming Budget must be about an end to the unacceptable and flagrant waste and plunder of public resources to shore up private interests."

Main image: Finance Minister Paschal Donohoe. Photo: Sam Boal/RollingNews.ie

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