Reports give conflicting forecasts for future health of economy
TWO new economic reports published today give conflicting forecasts on the health of the economy.
Consultants Ernst & Young has revised down its growth projections and claimed the economy would contract this year before growing 1.6pc in 2014.
This is more conservative than the estimates from the Department of Finance of 0.2pc for this year and 2pc for 2014.
By contrast, DKM Economic Consultants has a more optimistic view, claiming gross domestic product will expand 0.4pc this year before strengthening to 2.1pc in 2014.
But despite E&Y's somewhat gloomy predictions, the report remains upbeat, detecting signs of "green shoots" of recovery in the all-island economy.
"Exports have done their best to prop up the island economy and have made a sizeable contribution to gross domestic product," said Neil Gibson, economic adviser to EY Economic Eye.
The report described the recovery as two-tier and said that while unemployment levels remain high, they are set to stabilise this year at 13.7pc before improving modestly to 12.9pc in 2014 and 11.9pc in 2015.
"The Irish labour market is finally growing and, encouragingly, the growth is evident across a broad range of sectors providing confidence that the recovery will be a sustainable one," Mr Gibson said.
"The pace of recovery is still curtailed by austerity and consumer confidence that, whilst improving, remains scarred."
The report forecasts export growth of only 0.6pc in 2013, before rising to 3pc and 3.1pc in 2014 and 2015.
This is partly as a result of weak global conditions.
Meanwhile, DKM Economic Consultants said increases in investment and exports will fuel the "modest" increase this year as private consumption is expected to continue its decline.
Domestic demand is expected to record growth of 1pc in 2014, the first full year of growth since 2007, DKM said.
A 5.3pc increase in investment and a 0.9pc increase in private consumption are expected to fuel this growth.