Investor fears cast shadow on growth hopes
Published 26/07/2010 | 05:00
IRELAND's economic growth prospects are improving but confidence among Irish investors is falling " significantly", according to two separate reports published yesterday.
National Irish Bank economist Dr Ronnie O'Toole is expecting Ireland to post growth of 0.75pc this year, against his previous forecast of a flat performance.
The upgrade, revealed in his Quarterly Economic Bulletin, is chiefly linked to the fact that May's exports were up 8.3pc on April's, generating a monthly trade surplus of €4bn.
"Ireland's strong export sector, boosted by the weakness of the euro and falling business costs, should be able to take full advantage of any global recovery," Dr O'Toole writes.
He cautions, however, that despite a highly skilled workforce, "no amount of labour market flexibility can make the transition away from large-scale construction employment easy".
Dr O'Toole expects higher domestic demand as the savings rate eases, though he stresses that demand will continue to be "restrained".
Meanwhile, a study out from RaboDirect charts a "significant fall" in investor confidence since April.
Just 44pc of the survey's respondents say they are "optimistic" about the global economy over the next three months, down from the 64pc of investors back in April.
On the Irish front, 19pc of the 586 investors polled say they're optimistic about the economy, down from 23pc. Confidence in their own financial prospects has also fallen.