THE ECONOMIC AND Social Research Institute has predicted a growth in GDP of 1.3 per cent in 2013, which it said looks set to be more subdued economically than previously thought.
In its latest Quarterly Economic Commentary reports, GDP is estimated at 1.3 per cent for 2012 and is forecast at 1.3 per cent and 2.3 per cent in 2013 and 2014 respectively. Domestic demand remains very weak and is due to contract again in 2013 and 2014, though the pace of contraction is easing, it said.
The ESRI said the final outturn for growth over the forecast period is heavily conditional on the performance of the European economy, which at present is very weak.
The public finance position improved in 2012, with the agreed targets being comfortably met. In 2013 the targets are more challenging, mainly on the expenditure side.
Croke Park extension talks are opening up “important possibilities” to help the process of reducing expenditure, the report said. The full effects of any reductions achieved are more likely to be felt in 2014 however.
The rate of unemployment is forecast to decline from 14.9 per cent in 2012 to 14.6 per cent in 2013 and 14.3 per cent in 2014. However, the main driving force behind this reduction is ongoing net emigration, the research institute said.