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Trouble Brewing

These international problems could seriously wreck Ireland's economic plans

The Department of Finance is predicting big growth, but only if everything goes as it wants it to.

WHILE IRELAND’S TWO biggest parties continue to bicker over water charges, there could be major problems around the corner for the economy.

The new Stability Programme Update – published yesterday by the Department of Finance – points to problems brewing around the world as things that could derail financial predictions.

The document upwardly revises predicted GDP growth for this year to 4.9%, a jump of more than half a percentage point of what was penciled into Budget 2016 last October.

This is only if (and it is a big if) everything goes to plan, with uncertainty about the state of play internationally being described as “higher than at any stage since the height of the financial crisis”.

High on the list of things that could drag predicted growth off track is the looming possibility of Brexit. Back in November of last year the ESRI, a group that provides economic advice to the government, warned that there would be a “significant economic impact” if Britain votes to leave the EU in June.

Sterling has been taking a hit since the start of the year, and while that might be good news if you’re planning to take a trip to the North, Ireland’s economy would be more exposed should the UK exit.

Another major issue are the world’s ‘Emerging Market Economies’ or EMEs – of which China is by far the biggest.

The economies included under this umbrella have been increasing their share of the world’s GDP in recent years, and the document today warns that any “sharper-than-assumed slowdown” could create a “significant headwind” for the global economy.

At home there are also a few things worth keeping an eye on.

The reports points to an over-dependence on the high-tech sector and possible difficulties around having an export-led economy as concerns. 

Read: These are 5 things that could wreck Ireland’s economy all over again

Also: There are few clouds on the horizon for the Irish economy right now

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