‘Strong growth provides an opportunity to strengthen economic resilience’ - Quarterly Bulletin

26 January 2016 Press Release
  • Stronger growth performance underpinned by stabilising influence of policy and macroeconomic adjustments 
  • Combined favourable outlook, despite uncertainty from rising global risks 
  • GDP growth of 4.8 per cent is forecast for 2016 and 4.4 per cent 2017
    The full Bulletin and signed articles are available here.

See video here

The Central Bank published the first Quarterly Bulletin for 2016. The Bulletin examines recent trends in the domestic and international economies, as well as the Central Bank’s forecasts for the Irish economy and its position on domestic macroeconomic policies.

The Bulletin reports:

  • Stronger growth performance has been underpinned by both the stabilising influence of the policy and macroeconomic adjustments which have been undertaken, as well as the coming together of a broad set of favourable factors, which have reinforced each other to support growth.
  • Stimulus to incomes from an employment-rich recovery has been augmented by both the emergence of wage growth and the further boost to purchasing power from lower energy prices. Growth has also benefitted from a more benign policy environment, reflected in both the easing of the pace of fiscal consolidation and continued favourable financial conditions and some improvement in household and firm balance sheets.
  • The positive alignment of the factors above, many of which have acted to boost domestic demand, has helped growth to strengthen and broadly supports a continued favourable outlook.
  • GDP growth of 4.8 per cent is forecast for 2016, a marginal upward revision to the previous projection, while the forecast for GNP growth, at 4.3 per cent, is marginally lower. In 2017, on the basis of forecasts of growth in trading partner countries consistent with those underlying the latest ECB macroeconomic projections and reflecting some moderation in the growth of domestic demand, GDP is forecast to grow by 4.4 per cent, with GNP projected to rise by 3.9 per cent.

Chief Economist, Gabriel Fagan said: “Looking at current forecasts, there is still sufficient spare capacity to accommodate this strong growth over the next two years without encountering major constraints. More importantly, the strong growth outlook provides an opportunity to tackle the remaining legacies of the crisis and minimise future risks to economic, fiscal and financial stability. This opportunity needs to be taken. Reducing the remaining vulnerabilities and strengthening economic resilience are necessary to mitigate the risk of future boom-bust cycles and ensure stable and sustainable medium-term growth.”

The Central Bank has also published a signed article alongside the Bulletin, ‘Interconnectedness of the Irish banking sector with the global financial system’ and published an information note on ‘Recent Developments on Resolution Planning for Credit Institutions and Investment Firms’

For the first time, the Central Bank has also published short discussions on the outlook for the domestic and international economies with:

Gabriel Fagan, Chief Economist Video.

John Flynn, Head of Irish Economic Analysis video.

Luca Onorante, Acting Head of Monetary Policy video

There is also a short discussion with the author of the signed article Niamh Hallissey, Senior Economist, Financial Stability video.