DUBLIN: The Irish economy will grow by 3.5% this year and 3.6% in 2016, the European Commission has forecast.
This will give Ireland the fastest growth in the European Union and well above the forecast 1.3% growth for the euro zone.
Earlier in the week the Central Bank raised its growth forecasts to 3.7% this year and 3.8% in 2016.
In its Winter Economic Forecasts, the European Commission said that Ireland’s gross domestic product grew by 4.8% in 2014 – well ahead of the rest of the bloc.
It also forecast a continued fall in unemployment in the country, with the figure falling to 9.6% this year and 8.8% in 2016.
Live Register figures released yesterday put the unemployment rate at 10.5% in January.
On the wider euro zone, the commission said the bloc’s economic prospects were brighter now than three months ago thanks to cheaper oil, a weaker euro and the European Central Bank’s quantitative easing.
The EU executive arm raised its forecasts for gross domestic product expansion in the 19 countries sharing the euro to 1.3% this year from the 1.1% seen in November and to 1.9% in 2016 from an earlier 1.7%.
Growth last year was 0.8%, the Commission said.
“Europe’s economic outlook is a little brighter today than when we presented our last forecasts,” said Pierre Moscovici, Commissioner for Economic and Financial Affairs, referring to forecasts released in early November 2014.
Growth will also benefit from a recovery in investment.
The Commission sees it increasing 2% this year over 2014 and by 4.4% in 2016, boosted by the ECB’s money-printing measures and the European Union’s €315bn investment plan.
Investment grew by just 0.9% in 2014.
