The ESRI has doubled its growth forecast for the Irish economy for this year to almost 9 per cent, with growth being propelled by the twin engines of stronger-than-expected consumer spending on the domestic front, and a more favourable trade balance due to a decline in imports on the multinational side.
This will position the State as the fastest-growing economy in the euro zone this year. However, despite the upgrade, the ESRI also cautioned against an inflationary budget, and warned that its forecasts are based on an assumption that a Brexit deal will be struck by March 2019.
In its latest quarterly economic commentary, the Economic and Social Research Institute (ESRI) has forecast GDP growth of 8.9 per cent for 2018, followed by growth of 4.5 per cent for 2019. This compares with a GDP growth forecast of 4.7 per cent for 2018 and 3.9 per cent for 2019 given by the ESRI in June. Unemployment will fall to 5.7 per cent this year, and to 5.1 per cent in 2019, the ESRI has also said, slightly higher figures than its June forecasts (5.6 per cent and 5 per cent respectively).
The influential think tank said it had upgraded its GDP forecasts due to two main factors: firstly, consumer spending, on the back of falling unemployment and increasing disposable incomes, and modified investment, such as that in the construction space, have grown at a faster pace through the first half of 2018 than was previously expected.
Secondly, a decline in imports of research and technology-related services from the multinational sector has led to a sizeable improvement in the trade balance.
https://www.irishtimes.com/business/economy/esri-doubles-2018-growth-forecast-for-irish-economy-1.3641303#.W6tU97PXWE1.linkedin
