THE Central Bank said yesterday that it expects the economy to grow twice as quickly as the IMF does but urged the Government to increase competition in areas such as the law and medicine and to reform the public sector
The bank sees gross domestic product expanding 0.9pc this year despite consumer demand remaining "subdued". That's almost identical to the 1pc predicted by the bank back in January.
The IMF said earlier this week that it was halving its growth forecast to 0.5pc. A poll of 10 economists by Reuters earlier this month also forecast that the economy will expand 0.5pc this year. It would be the first time in four years that the economy has improved.
While slower growth would make it more difficult for the Government to meet its targets, the bank downplayed the differences between its forecast and the consensus forecasts from other organisations.
"I don't think this is a very significant difference," said the bank's director of economic services Maurice McGuire. "The general picture here is one of the economy improving."
Turning to commercial and residential property prices, the bank predicts the rate of decline will slow this year although it notes that the lack of accurate data make predictions difficult. Prices outside Dublin are likely to fall further than in the capital. Higher emigration is also likely to put renewed downward pressure on rents this year, it said.
"A definite trend appears to be emerging in that the market appears to be becoming more segmented, with the Dublin market pointing to a speedier adjustment following greater price declines, more stable rents and a smaller housing overhang than the rest of the country," the bank concludes.
The bank believes employment and disposable income is set to fall in the short-term. "For many people there is likely to be little sense of improvement in their economic situation," it added.