Sunday 17 November 2019

Ireland's growth to power ahead of EU peers

Caution: Valdis Dombrovskis of the EC has warned of headwinds
Caution: Valdis Dombrovskis of the EC has warned of headwinds
Donal O'Donovan

Donal O'Donovan

The European Commission has lifted its forecast for Irish economic growth this year despite Brexit exposures, but cut its wider euro-area outlook as global trade tensions and uncertainty bite.

In its autumn 2019 Economic Forecast, published yesterday, the Commission said Ireland's gross domestic product (GDP) would be up 5.6pc this year, compared with a 4pc rise it was predicting as recently as the summer.

The Commission has historically underestimated Irish growth, but the numbers do suggest Ireland will have the fastest pace of expansion in the EU this year.

Growth here is now expected to slow to 3.5pc in 2020, and to 3.2pc in 2021.

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That compares with the Department of Finance forecast for GDP growth of 5.5pc in 2019, and just 0.7pc next year.

A messy Brexit could make things far worse, the Commission warned.

Commission vice president for the euro and social dialogue Valdis Dombrovskis said the European economy had shown resilience amid a less supportive external environment, with growth and job creation robust, and domestic demand strong.

"However, we could be facing troubled waters ahead: a period of high uncertainty related to trade conflicts, rising geopolitical tensions, persistent weakness in the manufacturing sector and Brexit. I urge all EU countries with high levels of public debt to pursue prudent fiscal policies and put their debt levels on a downward path," he said.

The EU expects growth to remain under pressure next year, forecasting a euro-area expansion of 1.2pc. Inflation is projected to be 1.3pc, well below the European Central Bank target of under but near 2pc over the medium term.

The euro area, and Germany in particular, has already slowed, as tariff disputes hit manufacturing and weigh on confidence.

Irish Independent

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