Thursday 19 October 2017

Economy 'to grow by 9.6pc over two years'

The study predicted that unemployment will fall to 9.5pc in 2015 and 8.3pc in 2016.
The study predicted that unemployment will fall to 9.5pc in 2015 and 8.3pc in 2016.

Paul O'Donoghue

The Irish economy is to grow by 5.6pc this year and 4pc in 2016, according to a new consensus forecast carried out by DKM Economic Consultants.

But the Government is likely to "fritter away" money in the Budget, according to DKM chairman Brendan Dowling.

He added: "This will be an election Budget so expect some eye-catching giveaways. Unfortunately the scope for tax cuts will probably be frittered away in marginal changes rather than used to implement a more comprehensive tax reform."

The study, which based its estimate on projections from 14 Irish and international bodies such as the IMF, the EU and the OECD, found that the main driver for growth is a "strong increase for domestic demand".

The study predicted that unemployment will fall to 9.5pc in 2015 and 8.3pc in 2016. DKM said this is likely to "give a boost to consumer sentiment despite a slight dip in September." The forecast also estimated that private consumption will grow by 3.1pc in 2015 and 2.7pc in 2016 while the weak euro is expected to help exports grow by 10pc this year and 5.5pc next year.

However, Mr Dowling cautioned: "Most forecasts continue to see a sharp decline in growth in 2016. This is in part a reflection about the world economy and partly due to an ingrained belief in forecasters that the stellar growth of 2015 cannot be repeated."

Irish Independent

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