A SECOND PROJECTION within three days has suggested that Ireland’s economy will grow by 1 per cent overall this year.
Bank of Ireland’s quarterly economic outlook, published this morning, follows Tuesday’s report from employers group IBEC in predicting the 1 per cent increase, which is ahead of projections from both the Irish government and the EU-IMF Troika.
BoI’s chief economist Dan McLaughlin, who wrote the forecast, said the growth would be fuelled by the continuing success of Ireland’s export sector.
“Exports had their best performance in the first quarter for fifteen months and grew by over 6 per cent on an annual basis, supported by double digit growth in service exports,” he said.
This was attributed to improvement in Irish competitiveness, which meant exports were performing strongly even while the global economy continued to slow down and spending elsewhere in the eurozone had fallen.
The decline in the euro, which makes products priced in euro more affordable to British and US consumers, had also contributed to the strength of Irish exports.
“Overall, we now expect GDP to rise by 1 per cent this year, an upward revision from our previous 0.6 per cent – despite the 1.1 per cent decline in the first quarter,” he said.
McLaughlin further opined that the Irish economy was “now paying its way in the world and running a balance of payments surplus”, which was unlike many other peripheral European economies.
“The public sector deficit is now been offset by strong surpluses in both the household and corporate sectors,” he said.
The Department of Finance revised its projections for growth in April, cutting it from 1.3 per cent to 0.7 per cent, while the EU-IMF’s most recent projections only expect growth of 0.5 per cent.