Thriving export sector to be hit if 'double-dip' materialises
Ireland's thriving export sector is set to slow down as the global economy struggles to maintain growth, according to a new report.
Dr Ronnie O'Toole, the chief economist at National Irish Bank, says that while the figures for the first three months of this year are encouraging for Irish exporters, he suggests fears about a double-dip recession in the US and continuing problems in the eurozone could take a toll.
Forecasts suggest that exports will grow by 5.5pc in 2011, down from the previous forecast of 7pc he says.
"The global financial markets have been hit by a nasty cocktail of worsening macro-data and rising discontent among policymakers, which is affecting the outlook for Ireland's key markets in the US and Europe.
"A low-growth scenario for the coming two to three years seems increasingly likely in these markets."
European economies remain Ireland's most important market, accounting for almost 40pc of total Irish exports, but economic growth there is being held back by a sluggish performance in Germany and by stagnation in France, according to Dr O'Toole.
The UK economy, which accounts for 18pc of Irish exports, is also very weak, though high inflation in the UK means that Irish exporters are able to achieve higher prices for their produce than this time last year, he said.
And economic problems in the US, where a third of Irish exports go each year, will also pose difficulties.
He is more upbeat about the prospects for foreign direct investment, with Ireland continuing to attract multinational firms to create jobs here this year. Dr O'Toole expects it will be a strong year for Ireland in 2011.