Domestic demand expected to make big contribution to economic growth - Central Bank
DOMESTIC demand is now expected to make a larger contribution to growth than previously thought, the Central Bank has said, reflecting the strength of the recovery.
In its latest economic bulletin, published this morning, officials in Dame Street said the economy is expected to grow by 3.8pc this year, fractionally better than had been anticipated, and 3.7pc in 2016.
The Central Bank said the momentum of recovery in the economy continues to build and broaden, with domestic demand now making a significant positive contribution to growth.
“While there is little change to the overall outlook for GDP growth in 2015 and 2016, as compared to the forecasts published in the last Bulletin, the composition of growth is slightly changed, with domestic demand now seen as making a stronger contribution than previously envisaged,” the Central Bank said.
For this year and next year, the Central Bank estimates that domestic demand is expected to grow, on average, by 3.4pc per year supported by further gains in consumer and investment spending.
“As a result, it is envisaged that GDP growth will be increasingly driven by domestic sources in coming years,” the Banks said.
Consumer spending is expected to grow by 2.2pc this year, double the rate recorded last year.
The Central Bank is forecasting that the unemployment rate will drop to 9.8pc this year, and fall to 8.7pc in 2016.