Business Irish

Friday 23 February 2018

Irish economy to grow by 3.6pc this year - European Commission

Michael Noonan
Michael Noonan
Colm Kelpie

Colm Kelpie

The European Commission has forecast Ireland’s economy will grow 3.6pc this year, slower than the Government’s projection.

This would make it the joint fastest economy in Europe along with Malta. The Irish economy is expected to grow by 3.5pc next year, Brussels said. 

In its spring economic forecast, the Commission said Ireland’s economy remerged last year as one of Europe’s top performers.

“Economic activity is expected to remain resilient in 2015 and 2016, as domestic demand takes over net exports as the main growth driver,” the Commission said.

The 3.6pc growth rate is fractionally higher than the 3.5pc projected by the Commission  in its winter forecast.

In its spring statement last week, the Government forecast growth this year of 4pc.

Brussels however cautioned  that due to the high level of private debt, the strength of private consumption remains uncertain.

“The Government’s deficit and debt are forecast to improve on the back of sustained economic activity,” the Commission said.

The Commission said unemployment is expected to fall to 9.6pc this year, and drop further to 9.2pc next year.

The deficit, as a percent of GDP, is to drop to 2.8pc this year, much higher than the 2.3pc forecast by the Government. Under a no-change policy, the Commission is forecasting the deficit will rise to 2.9pc next year.

Gross public debt will drop to 107.1pc of GDP this year, and fall further to 103.8pc next year.

Meanwhile, Eurozone economic growth will be stronger than previously expected this year thanks to cheaper oil, a weaker euro, stable global growth and supportive fiscal and monetary policies, the Commission said.

It also forecast a pick-up in inflation later this year and declining unemployment.

The Commission expects Eurozone economic growth to accelerate to 1.5pc in 2015 from 1.3pc forecast three months ago. It kept unchanged its previous forecast of 1.9pc  growth for next year.

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