Monday 20 November 2017

European Commission forecasts Irish growth of 1.7pc in 2014

Economy is stabilising but challenges remain

European Economic and Monetary Affairs Commissioner Rehn
European Economic and Monetary Affairs Commissioner Rehn
Colm Kelpie

Colm Kelpie

THE European Commission’s growth forecasts for Ireland next year are weaker than the projections set out by the Government

The Brussels-based body said growth in 2014 will be just 1.7pc – less than the 2pc forecast by the Department of Finance in the Budget.

And it said the economy will remain largely flat this year, growing by just 0.3pc.

This is broadly in line with the Government’s predictions for growth of 0.2pc. Growth will accelerate to 2.5pc in 2015, according to the EU’ executive arm.

In May the Commission had forecast growth of 1.1pc this year and 2.2pc next year.

The Commission said unemployment will hit 13.3pc this year, before falling back to 12.3pc in 2014.

European Commission Vice President Olli Rehn said Ireland is heading towards a successful exit from the bailout programme.

He said it was up to the Government to decide if it wanted to apply for a so-called precautionary credit line, to ease the transition from bailout to full market access.

It comes as Finance Minister Michael Noonan meets Eurogroup chair and Dutch Finance Minister Jeroen Dijsselbloem in The Hague today to discuss bailout options.

Mr Dijsselbloem chairs the monthly meetings of Eurozone finance ministers and is therefore regarded as one of Europe’s most influential finance ministers.

The eurozone economy will expand slightly more slowly next year than previously expected because of weaker private demand and investment and inflation will stay well below the central bank target over the next two years.

The European Union’s executive arm said the euro-area economy will expand 1.1pc in 2014 after a 0.4pc contraction this year.

In 2015, the eurozone is to accelerate to growth of 1.7pc.

In May, the Commission forecast that the eurozone would grow 1.2pc in 2014, but it then made more optimistic assumptions on private consumption and investment, even though assumptions of government demand remained unchanged.

"There are increasing signs that the European economy has reached a turning point," EU Economic and Monetary Affairs Commissioner Olli Rehn said in a statement.

"The fiscal consolidation and structural reforms undertaken in Europe have created the basis for recovery," he said.

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