Business Irish

Tuesday 12 November 2019

Central Bank revises economic forecast upwards as growth of 4.5pc expected in 2017

Central Bank.
Central Bank.
Louise Kelly

Louise Kelly

The Irish economy is forecast to grow 4.5pc this year and 3.6pc in 2018, revised upwards from 3.5pc and 3.2pc respectively at the Central Bank's last forecast.

In its third Quarterly Bulletin for 2017, the bank said that gains in employment and incomes are expected to remain the main driver of growth.

Forecasts for employment have also been revised upwards, with 2.1 million people expected to be in work in 2018 - the first time in 10 years

Meanwhile, inflation is expected to increase by just 0.3pc in 2017, a downward revision from 0.7pc since the last Bulletin.

"The Irish economy continues to grow at a strong pace and the prospects for sustained and solid economic growth remain positive," Gabriel Fagan, Chief Economist, said.

"Revised projections for growth this year and in 2018 reflect both stronger momentum in the domestic economy and improved prospects for external demand, especially from our European trading partners."

While the report is largely positive, the Central Bank warned that Brexit and the sensitivity to other potential international shocks continue to pose risks. However, the Central Bank said it has not made any adjustments to its forecast in this regard.

"As a small and open economy, Ireland continues to face economic risks externally," Mr Fagan said.

"And despite there being little new information emerging to date, it is clear that the economic impact of Brexit on Ireland is set to be negative and material. At home, we must continue to prudently monitor the risk of overheating."

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