Quarterly Bulletin No.3 2018

Read the Forecast Summary Table | pdf 1758 KB.

Disclaimer: The direct pdf page links do not work for users who are browsing on Safari.

Read the full Comment for Quarterly Bulletin No.3 2018 | pdf 1758 KB.

Léigh tráchtaireacht ar an Timpeallacht Gheilleagrach | pdf 1758 KB.

Disclaimer: The direct pdf page links do not work for users who are browsing on Safari.

Following a strong performance last year, the outlook for the Irish economy remains positive though headline GDP growth continues to distort the underlying trend. The latest National Income and Expenditure (NIE) accounts indicate that GDP growth last year was 7.2 per cent. Excluding the contribution to headline growth from the globalised activities of multinational enterprises (MNEs) based here, the underlying growth rate in 2017 was in the region of 5 per cent and broadly balanced with positive contributions from both domestic demand and net exports.

A similar outlook is in prospect for this year with some moderation in growth next year as the economy approaches full employment. In the absence of divergent trends in the globalised sectors of the economy, GDP growth of 4.7 per cent this year, moderating to 4.2 per cent in 2019 will be broadly in line with the underlying trend.

Read this chapter in full: Irish Economy | pdf 1758 KB.

Disclaimer: The direct pdf page links do not work for users who are browsing on Safari.

Financing conditions for households have improved further since the start of 2018. The pick-up in mortgage lending during Q1 2018 continued into the second quarter and more forward-looking indicators suggest further increases in the short-to-medium term. Notwithstanding the substantial deleveraging of the household sector in recent years, Irish households remain the fourth most highly indebted in the EU.

Interest rates on new lending to small and medium size enterprises (SMEs) continue to decline, and the margin between interest rates on existing and new loans to (SMEs) has tightened further. Irish banks continue to re-balance their funding towards private sector deposits and their issuance of debt securities has started to stabilise after a long decline.

Read this chapter in full: Financing Developments in the Irish Economy | pdf 1758 KB.

Disclaimer: The direct pdf page links do not work for users who are browsing on Safari.

Expenditure reductions played a key role in the Irish fiscal consolidation process over the period 2008 to 2013, with declines in public investment spending particularly notable. Plans to increase government capital spending in Ireland should lead to a significant increase in the public capital stock.

An important consideration is how this investment is financed. Using the Central Bank’s Dynamic General Equilibrium model, we show that adopting budget neutral investment spending can generate the long-term benefits of a higher public capital stock while at the same time limiting the risk of overheating dynamics and negative consequences for the public finances.

Read the signed article in full | pdf 1758 KB.

Disclaimer: The direct pdf page links do not work for users who are browsing on Safari.

Read the full Statistical Appendix | pdf 1758 KB.

Disclaimer: The direct pdf page links do not work for users who are browsing on Safari.