Think-tank Nevin Institute forecasts growth rate of just 1.1pc
THE trade-union supported Nevin Institute has forecast growth of just 1.1pc next year -- significantly lower than projections from the Department of Finance.
In its latest economic commentary, the body said GDP would rise by 0.5pc this year -- fractionally more optimistic than the Government's forecast of 0.3pc.
But its belief that GDP would rise just 1.1pc in 2014 is below the 2pc estimate from the Government.
Nevin also forecast that the Government will just fractionally miss a crucial target of reducing the deficit to below 3pc of the value of the economy by 2015, claiming it will come in at 3.1pc.
Nevin said growth rates were being dragged down by about 0.5pc of GDP each year given the contraction in the pharmaceutical sector.
But it said that even without this, austerity policies would continue to stunt recovery.
"We anticipate small but positive economic growth in 2014 although concerns remain regarding the impact of contractionary fiscal measures in Budget 2014; a weakening outlook for our export markets; continuing high long-term unemployment; the continuing overhang of personal debt and the impact of changes in the pharmaceutical sector,'' it said.
Key points from the review included:
* Growth will increase in 2015 to 1.8pc and 3pc in 2016.
* 2.3pc increase in employment this year. Further employment growth of 1.1pc in 2014, 1.2pc in 2015 and 1.5pc in 2016 on the back of increases in growth, investment and slow recovery in personal spending.
* Unemployment will fall to 13.1pc this year, declining to 10.4pc in 2016.
* Deficit will fall to 4.8pc next year, reaching 3.1pc in 2015 and 2.6pc in 2016.
The report also criticises the progress by the Government and others in establishing a strategic investment fund to support investment in the economy.
The study also looks at trends in employment and found that 20.7pc of the workforce in 2010 were classified by the EU as being low-paid, with the cut-off being €12.20 per hour.