Broker raises forecast of economic growth
Published 06/04/2010 | 15:32
One of the country's biggest stockbrokers today revised upward its financial forecast for next year, predicting stronger economic growth than first thought.
Goodbody maintains the country will not pull out of recession until the second half of 2010 with its estimate of a 1pc contraction for the year still on the cards.
But 2011 has been given a more positive outlook with financial experts at the broker expecting the economy to grow 2.8pc, up from the original prediction of 2.4pc.
Ireland's export trade will help pave the way for a return to growth by the end of this year, while a recovery in consumer demand will kick in during 2011.
Goodbody said Government plans for the banking crisis should deal with it once and for all, despite claiming a predicted €33bn bailout bill is much higher than expected.
The broker said this equates to a fifth of Gross Domestic Product, the value of all good and services produced in the country.
Chief economist Dermot O'Leary said the economy was heading in the right direction.
He said: "Although economic activity on the ground is still quite weak, we are encouraged by the degree of progress that has been made in relation to the policies that will eventually lead to a recovery in the economy, and we now have a clearer idea of the overall cost of the banking crisis which should bring some more certainty back into the system."
And the broker also believes house prices will fall another 10pc before bottoming out, with the greater Dublin area to be the first to recover.
Prices have already fallen 40pc in and around the capital, Goodbody said.
Key findings of Goodbody's latest economic report include:
:: An upward revision in Gross Domestic Product projection, from 2.4pc to 2.8pc
:: Estimates for economic growth this year remain unchanged at -1pc.
:: The number of vacant houses stands at 15pc in the country, 10.5pc in Dublin and 19.9pc in the border counties.