Investment to spark trade growth of 125pc, says HSBC
IRISH trade will expand by 125pc between now and 2026 as foreign investment boosts exports, HSBC bank has forecast in a report.
The report sees global trade expanding 98pc in the same period. Trade will expand by around 4.5pc a year over the next nine years before accelerating to 7.2pc after 2021, HSBC says.
The forecasts are based on recent spate of announcements about foreign direct investment which shows activity here increased 22pc in 2011 compared to a 3pc decline elsewhere in the EU.
The effect of this investment is likely to be felt from 2017 onwards, the report adds.
"The latest HSBC forecast report clearly demonstrates that Ireland will benefit from its well-established trade links, both in the US and Europe and large Asia-Pacific markets," said Ananth Krishnan from HSBC Ireland.
"We also benefit from a strong established market in the export of pharmaceuticals and this will be a key area of growth in the future."
Changes to diary quotas after 2015 could also have a big effect on Irish exports, he said.
The report comes as Irish exports are slowing and policy advisers worry about some drugs going off-patent causing a knock-on effect to exports. About half of all Irish exports are linked to the pharmaceutical industry.
The HSBC report says growth to established trade partners such as the US, UK and Germany will be in the single digits while growth to new markets will be much stronger.
Saudi Arabia is expected to be the fastest growing export market, with growth of 11pc. Romania is the second fastest with growth in exports of 10.6pc.
Both of these growth markets will be driven by medicines and agrifoods. China and Hong Kong are both expected to see growth of 9.5pc.
Overall, the report predicts a tipping point in the balance of trade power globally where imports will grow faster than exports in 'emerging' markets within the next five years.
In China, India and Brazil, the rate of growth in imports will exceed that of exports over the next five years, continuing to 2026.
In contrast the US, UK, France and Spain are expected to see export growth exceed the rate of imports.