- Downside risks for Irish economy arise mainly from uncertainty related to Brexit
Development of more meaningful measurement of actual Irish economic activity needed to avoid distortions
- Consumer spending, employment and significant pick-up in construction and equipment investment helping to drive growth
- The Central Bank has published the third Quarterly Bulletin for 2016. The Bulletin examines recent trends in the domestic and international economies, as well as presenting the Central Bank’s forecasts for the Irish economy and it’s views on domestic macroeconomic policy issues.
The Bulletin reports:
- Brexit will have both short and long-term negative impacts. Quantifying the impact with precision is difficult, although growth predictions for Ireland have been cut by 0.2 per cent for 2016 and 0.6 per cent for 2017 due to Brexit.
- Assessing both the performance and prospects for the Irish economy has been made more problematic by the scale of revisions to the 2015 National Accounts data. Underlying domestic demand and employment remain more useful indicators of activity in domestic economy.
- Projected increase in employment of 67,000 in 2016 and 2017.
- GDP growth of 4.9 per cent is forecast for 2016, a marginal downward revision of 0.2 per cent from the previous projection. The forecast for GDP growth in 2017 is 3.6 per cent, down 0.6 per cent from the previous forecast.
Chief Economist, Gabriel Fagan said: “Assessing both the performance and prospects for the Irish economy has been made more problematic, respectively, by the scale of revisions to the 2015 National Accounts data and the outcome of the UK referendum on membership of the European Union. There is a need to develop more meaningful, commonly agreed measures of the actual level of Irish economic activity that accurately mirrors developments within the economy. While the Irish economy has become less reliant on the UK for trade over recent decades, the UK remains a particularly important market for indigenous firms. Some sectors, including agri-food, clothing, footwear and tourism continue to have a relatively high dependency on exports to the UK and, consequently, could be affected disproportionately.”
The Bulletin also contains an overview on how the Central Bank incorporated the impact of Brexit into it’s economic forecasts.
Watch interviews on the Bulletin
The Central Bank has published short discussions on it’s You Tube Channel on the outlook for the domestic and international economies as follows:
- Gabriel Fagan, Chief Economist discusses the outlook for the Irish economy.
- Dermot Coates, Senior Economist discusses the volume of cash buyers in the residential property sector.
The full Bulletin and signed articles are available here.