Friday 18 August 2017

Irish economy on course to outpace euro zone for fourth year in a row

Last week, figures showed Ireland’s gross domestic product rose to a better-than-anticipated 5.2pc, representing its third successive year as the fastest expanding economy in the eurozone (Stock picture)
Last week, figures showed Ireland’s gross domestic product rose to a better-than-anticipated 5.2pc, representing its third successive year as the fastest expanding economy in the eurozone (Stock picture)

Gretchen Friemann

Ireland looks set to remain the best-performing economy in the eurozone for a fourth year in a row, despite escalating fears over Brexit.

The fresh outburst of optimism follows a survey of economists by Bloomberg, which showed the consensus growth rate for 2017 has risen to 3.5pc from an earlier prediction of 3.1pc.

The continued influx of foreign investment, combined with soaring employment levels and robust retail sales figures have fuelled expectations the potential ill-effects of Brexit won't be felt for at least 12 months.

Eoin Fahy, chief economist of KBI Global Investors, pointed out the improving performance comes against the backdrop of a stronger global economic outlook and predicted the Irish economy could expand by 4pc this year, far exceeding the Central Bank's expectation of a 3.3pc growth rate.

He said while Brexit is a "definite negative" and likely to cause "material disruption", he stressed the timing of the UK's departure from the eurozone is unclear and argued its impact may not be felt until mid 2019.

"So there is that question mark of uncertainty over Brexit, but it's a matter of when, and when you look around the world economy today you see a pretty healthy picture."

His sanguine view chimed with Investec's chief economist Philip O'Sullivan, who said he too plans to revise his growth estimates upwards.

Last week, figures showed Ireland's gross domestic product rose to a better-than-anticipated 5.2pc, representing its third successive year as the fastest expanding economy in the eurozone.

Mr O'Sullivan predicted Ireland will retain this status for a fourth year in a row in 2017, and argued that while the multinational sector can distort the figures, the "underlying performance is incredibly strong".

Ireland is "churning out jobs" he said, with an additional 65,000 people entering employment last year, and he claimed the strength of the recovery was underlined by strong retail sales figures and the rising increase in house purchases.

Yesterday, figures released by the Central Bank showed a jump in the volume of owner-occupier mortgages with €449m worth of loans issued in the final three months of 2016 - marking the largest net increase since the regulator began monitoring the sector in March 2011.

Irish Independent

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