DUBLIN: Ireland is on course to be the fastest growing economy in the euro zone for a fourth straight year, according to Davy Stockbrokers. In its latest economic outlook the firm predicts that gross domestic product (GDP) will grow 5 per cent in 2017, up from a previous forecast of 3.7 per cent. This is well ahead of the current consensus forecast for 1.7 per cent growth across the euro area as a whole. Davy said the softness in some indicators, particularly those relating to the export sector, following last year’s Brexit referendum had “now unwound”, pointing to faster-than-expected growth in early 2017. It also noted that €20 billion of intellectual property assets imported in the final quarter of 2016 had artificially depressed GDP growth in 2016. However, this would have the opposite impact this year.
Davy also upgraded its growth forecast for consumer spending, the main driver of domestic growth, predicting it would expand 3.4 per cent in 2017, up from 3 per cent in 2016, on foot of further employment gains and wage rises. Employment is expected to expand by 2.8 per cent in 2017 and 2.3 per cent in 2018, sufficient to push Ireland’s unemployment rate to 5.3 per cent next year, a level which the Economic and Social Research Institute (ESRI) equates to full employment.
