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Irish economic growth expected to slow even with Brexit trade deal, says Central Bank

Overall, the country’s economic growth has been described as “broadly positive”.

Image: Shutterstock/Gena96

ECONOMIC GROWTH IN Ireland is “broadly positive” but expected to slow down in the coming years even if an EU-UK trade deal is reached, according to the Central Bank. 

The first quarterly bulletin of the year from the Central Bank has outlined that economic growth has stayed “remarkably resilient” in recent years despite weak world demand and heightened Brexit uncertainty. 

Director of economics and statistics at the Central Bank Mark Cassidy said economic growth has been positive, but is expected to slow down. 

“While the economy has been growing strongly in recent years, the pace of that expansion is likely to slow down,” Cassidy said in a statement. 

“Our forecasts are based on an assumption that an EU-UK trade agreement is in place from January 2021, but even in that scenario, which is not guaranteed, we still see the pace of economic growth gradually slowing.” 

Ireland’s economy is approaching full employment, the quarterly bulletin says. There will a gradual growth in services prices as a result of this. 

Consumer spending growth last year was broadly similar to that in 2018.    

Strong export growth is expected to continue, although it was mainly focused in certain sectors such as pharmaceuticals, computer processors and computer services.

Growth in other sectors was more modest. Employment growth is also expected to slow down somewhat from previous strong growths.  

The economic impact of a Brexit trade deal will depend on “how close or far” they are from the current arrangement, the Central Bank governor Gabriel Makhlouf said today.

“But it seems likely and unsurprising that any future economic relationship between the EU and the UK will have more hurdles than the status quo,” Mahklouf said at the European Financial Forum. 

He added that the economic impact of the coronavirus in China “adds to already existing uncertainties” worldwide. 

“While it is premature to reach any conclusions, there is the potential for a negative shock to the growth of the international economy in the short-term,” he said.  

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