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Economy set to grow 3.3% this year (and we won't be getting that harsh budget after all)

Merrion Stockbrokers is bullish on the economy, and says that an adjustment of only €1 billion is needed in Budget 2015.

Image: Eamonn Farrell/Photocall Ireland

THE ECONOMY WILL grow by 3.3% this year, rising to 3.9% in 2015, Merrion Stockbrokers has predicted.

The figures are contained in its latest quarterly economic outlook, and follow on from positive exchequer returns and economic growth figures released by the Government last week.

The Dublin firm says that the latest figures and the strong outlook for the economy will head off any prospect of the Government enforcing the €2 billion adjustment that fiscal hawks have been calling for in Budget 2015.

“An increase of 3.0% plus looks on the cards which should significantly ease the burden on the level of fiscal austerity required in the October budget, especially as sizeable upward revisions to nominal GDP have reduced Ireland’s debt/GDP figures.”

The stockbrokers said that Ibec’s call for an adjustment of just €200 million in the budget “looks overly optimistic”, but said that package of cuts and tax increases adding up to around €1 billion should be sufficient to hit fiscal targets.

Merrion said that the unemployment rate should average out at 11.6% this year, down from 13.1% in 2013.

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Double digit growth for the housing market around the country is expected, with 10% predicted on a national level, with Dublin predictably outstripping the rest of the country at between 15% and 20%, compared with an average increase of 1.8% during 2013.

Merrion said that the budget deficit will comfortably beat the 4.8% target for the year, projecting a final figure closer to 4.4%.

Read: Michael Noonan says that Ibec’s budget sums “are at best a guesstimate”>

Read: €800 million, not €2 billion in budget cuts is enough, Government told>

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Jack Horgan-Jones

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