‘The outlook for the recovery continues to be broadly favourable’ - Quarterly Bulletin

• The forecast for GDP growth for 2016 revised upwards to 5.1 per cent
• Domestic demand is now firmly the main driver of expansion and growth is underpinned by improvement in the labour market
• There are potential risks to the outlook from external factors

The Central Bank has published the second Quarterly Bulletin for 2016. The Bulletin examines recent trends in the domestic and international economies, as well as well as presenting the Central Bank’s forecasts for the Irish economy and its views on domestic macroeconomic policy issues.

The Bulletin reports:

• GDP growth of 5.1 per cent is forecast for 2016, a marginal upward revision of 0.3 per cent from the previous projection. The forecast for GDP growth in 2017 is 4.2 per cent, down 0.2 per cent from the previous forecast.
• The strengthening of economic growth over the past year has been underpinned by relatively strong and broad-based growth in employment.
• The improvement in the labour market, which has probably been the most important factor in driving the recovery in recent years, has been particularly marked, with average annual employment growth of over 2 per cent since 2012.
• The main impetus to growth in 2016 and 2017 is projected to come from the continued strength of demand within the economy in the form of solid growth in consumer spending and investment.

Chief Economist, Gabriel Fagan said: “The growth outlook is relatively favourable and domestic economic momentum is strong, although there are some risks to the outlook from external factors. The main driver of growth will be the continuing recovery in employment and incomes, although following its very strong growth in recent years, employment growth is projected to gradually moderate over the forecast horizon.”

The Central Bank has also published short discussions on the Central Bank’s You Tube Channel on the outlook for the domestic and international economies, as follows:

• Gabriel Fagan, Chief Economist, John Flynn, Head of Irish Economic Analysis and Luca Onorante, Acting Head of Monetary Policy, discuss the outlook for the Irish and European economies.
• Joe McNeill, Head of Statistics discusses economic statistics.

There is also a short discussion with Conor O’Toole, Senior Economist, co-author of the signed article ‘Irish SME Investment in Economic Recovery’.

The full Bulletin and signed articles are available here.

Notes

The Central Bank has also published the following signed articles alongside the Bulletin:

1. An Overview of the Enhanced Interest Rate Statistics for Ireland
2. Irish SME Investment in Economic Recovery
3. Understanding SME Interest Rate Variations Across Europe

The press conference for the Quarterly Bulletin will be available on the Central Bank’s YouTube channel https://www.youtube.com/user/centralbankireland in the afternoon of Friday 1 April 2016.