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Like it's 2008 - Irish people set to break the €100 billion barrier in consumer spending this year

Spending will be at a greater level than the previous high-water mark in 2008, if the forecasts are to be believed.

3609 Christmas shoppers_90531205 Source: Leah Farrell/Rollingnews.ie

SPENDING ON CONSUMER products is set to hit record levels in Ireland this year, according to the Central Bank.

The regulator’s latest quarterly bulletin indicates that the spending power of Irish citizens is flourishing due to a strong jobs market and wage competition.

Meanwhile, revised upward forecasts suggest that the economy is set to grow by 4.8% this year and 4.2% in 2019, up slightly from the bank’s previous bulletin.

Irish consumer spending will pass the €100 billion mark, up 2.9%, according to the bank’s predictions to €103.5 billion, a higher peak than that seen before the economic crash bit hard in 2008, indicating high levels of consumer confidence.

Meanwhile, a further 99,000 people are expected to leave the live register and be in work by the end of next year, with wages set to rise in tandem per employee by 3.3% on average for 2018 and 2019.

Unemployment is expected to average at 4.8% in 2019, down from the 5.6% predicted for this year.

Inflation is set to rise slightly from 0.8% to 0.9% in 2019.

A new way for forecasting housing completions will see 23,500 units constructed in 2018, rising to 28,500 next year, the report predicts.

It isn’t all good news however, with the Central Bank warning that Donald Trump’s controversial US tax reform, coupled with possible changes to the taxation of online and digital services and the risk of international protectionism, in the run-up to Brexit for example, capable of having a negative influence on the otherwise thriving economy.

“While today’s forecasts are positive, we have to remember that the highly open and therefore volatile nature of the Irish economy means we can take nothing for granted,” said the Central Bank’s director of economics and statistics Mark Cassidy.

We have extensive links to other economies through trade, technology and finance and so unexpected events could see the growth in our economy thrown off course.

He warned that while Brexit has caused “relatively little pain” thus far to Ireland’s finances, prudence dictates that the Central Bank plan for a time when things have taken a turn for the worse.

“Any obstacles to the way the UK currently trades with the EU is likely to generate a reduction in long-term living standards in Ireland, reduce the range of imported goods available to Irish consumers and make it more difficult for domestic firms to export their goods,” Cassidy added.

You can read the report in full here

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