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Davy revises projections for growth in Irish economy... upward

Here’s something you don’t see every day… someone suggesting the economy will grow by more than first predicted.

Image: patpitchaya via Shutterstock

STOCKBROKING FIRM DAVY has issued new projections for the Irish economy for 2013 – revealing it expects the economy to grow by more than it first expected.

The firm’s latest forecasts for the Irish economy, published this morning, include the projection that Ireland’s GDP – the total value of all goods and services produced here in 2013 – to rise by 1.3 per cent.

The forecast marks a significant improvement on the 0.9 per cent it had originally expected when it issued its last forecast in October.

The firm said its improved forecast was because the slowdown in the economy in the first half of 2012 was “shallower than previously thought”.

“In particular, investment spending was revised to 10 per cent year-on-year growth in [the third quarter of] 2012, the strongest rise in capital expenditure for many years,” it added, suggesting that foreign investment had come “on stream” in 2012 and was likely to continue to do so.

Davy also projects an increase in employment of 0.6 per cent this year – though that equates to a net gain of about 11,000 jobs, which would make little dent on the numbers out of work.

The news is not all positive, however: the firm expects the growth of Ireland’s export sector to fall back a bit, blaming the ‘patent cliff’ and the economic difficulty elsewhere in the Eurozone for the fall.

“A sharp decline in goods exports look likely,” it says, projecting that the fall in exports will take about 1 per cent off the total GDP that could have been achieved.

Read: Rehn: Budget 2014 should not be eased after promissory note savings

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Gavan Reilly

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