Thursday 23 November 2017

More sterling falls could dent Irish growth - Commission

Pierre Moscovici
Pierre Moscovici
Colm Kelpie

Colm Kelpie

Further falls in sterling as a result of the Brexit vote could dent economic activity in Ireland, the European Commission has said, as it revised down Irish growth.

In its latest economic update, Brussels said Irish GDP would grow by 4.1pc this year. That's down from 4.9pc in the spring. Growth next year is also expected to be fractionally smaller than previously forecast.

It said risks have heightened considerably since the UK referendum in June.

But the Commission said that stronger-than-expected investment in infrastructure and housing could push up employment and household spending. And it said the potential for firms to shift here as a result of Brexit could boost investment spending further.

"Risks to the outlook relate mostly to uncertainty following the UK 'leave' vote," the Commission's note on Ireland said.

"Further falls to sterling or hits to consumer of business confidence could weigh on economic activity."

The Commission said the economy would grow by 3.6pc next year, down fractionally on its spring forecast. Brussels forecasts 2017 Eurozone growth of 1.5pc and EU growth of 1.6pc.

Economics Commissioner Pierre Moscovici, inset, said European growth will hold up next year against a more "challenging backdrop than in the spring".

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