26 January 2017
- Irish economy continues to grow at a relatively healthy pace, with strong employment growth.
- Growth forecasts revised slightly downward from previous Bulletin, reflecting weaker outlook for net exports
- Brexit remains the main downside risk to the economy.
- The main driver of growth will be continuing gains in employment and incomes, with external factors posing risks to the outlook.
The Central Bank has published the first Quarterly Bulletin for 2017. 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 its views on domestic macroeconomic policy issues.
The Bulletin reports:
- Irish GDP is forecast to grow by 3.3 per cent this year, down 0.3 per cent from the previous Bulletin, reflecting a weaker outlook for net exports.
- GDP growth was broadly consistent with underlying domestic demand and employment. This masked offsetting trend in investment and trade.
- Personal consumption expenditure forecast to remain a key driver of growth. Despite risks, 2018 outlook is for per-capita consumption levels to surpassing pre-crisis levels.
Chief Economist Gabriel Fagan said: “The most reliable measures of domestic spending and economic activity suggest that the Irish economy continues to grow at a relatively healthy pace, though there are signs that growth momentum has slowed a little. Looking ahead, while the prospects for sustained, solid growth remain positive, external factors, particularly uncertainties in relation to Brexit, pose risks to the outlook. To date, in the absence of any weakening in the UK economy, the impact of the Brexit referendum outcome on the Irish economy has mainly been felt through the volatility in the euro/sterling exchange rate. Uncertainty in the period following the referendum vote was reflected in a marked weakening of business sentiment indicators, which subsequently rebounded strongly, suggesting a muted overall impact from Brexit-related factors over the second-half of 2016.”
On the Bank’s YouTube Channel, Chief Economist, Gabriel Fagan discusses the outlook for the economy.
In addition, Jenny Osborne-Kinch discusses her signed article “The Aircraft Leasing Industry in Ireland: Cross Border Flows and Statistical Treatment“
The full Bulletin and signed articles are available here.