Business Irish

Friday 23 March 2018

The Irish economy is actually growing even if it doesn’t feel like it – ESRI

David Duffy, Research Officer at the ESRI
David Duffy, Research Officer at the ESRI

Brian Hutton

IRELAND’S economy will have grown throughout last year for the first time since 2007, economists have predicted.

But despite the technical emergence from recession, it will not feel like it for most people as joblessness and emigration continue to haunt the country.

The Economic and Social Research Institute (ESRI) think tank said in its quarterly forecast that the economy will have grown by 0.9pc last year.

This is less than half of what was originally predicted (2.2pc) but it will be the first time the economy has grown on an annual basis for three years.

Official figures are expected next month.

The think tank has forecast a similarly slight growth rate for the rest of this year - also 0.9pc.

While it believes things will pick up next year, to 2.3pc, the growth is down to improving exports rather than increased spending on the high street.

People are expected to remain cautious while the outlook in Europe is uncertain.

David Duffy, research officer at the ESRI, said spending in the shops and on services should remain low while savings will stay at high levels.

The think tank believes average unemployment will drop from 300,000 last year to 280,000 next year but a lot of this will be down to the continued exodus of people looking for a better life abroad.

This year alone it is expected that 60,000 people will emigrate.

In its report, the ESRI suggests the government has few options to boost the homegrown economy while it is bound to put order back in the public finances.

But it recommends measures be taken to cut prices - which it says are still too high - with more competition needed.

The think tank has flagged up the emergence of just two main banks - Bank of Ireland and AIB - as a cause for concern.

It has also suggested improvements in infrastructure, such as broadband, and tax reforms.

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