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The ESRI has made four predictions about a strong Irish economy in 2017

Brexit does, however, pose some risks.

Image: Sam Boal/Photocall Ireland

THE ESRI IS predicting a strong performance by the Irish economy next year despite Brexit likely hitting exports.

The Economic and Social Research Institute is predicting GDP growth of 3.5% for 2017 following 4.2% this year.

A continued decline in the rate of unemployment is also expected with a forecast of 6.8% by the end of next year. Currently the rate sits at 7.3%.

The ESRI says that growth could potentially have been higher were it not for the Brexit vote and other “trade-related uncertainty”.

Despite this, domestic sources of demand are being described as “robust”, leading to the ESRI’s overall positive quarterly assessment.

“The building and construction components of investment have picked up in recent quarters and should continue to grow into the New Year, resulting in approximately 17,500 housing completions in 2017,” reads a summary of the report.

The ESRI also says that consumer sentiment has remained steady in recent months and is above the long-term average. It is predicting strong consumption growth of 3.5% in 2017.

The report’s author Kieran McQuinn warns, however, that there is significant uncertainty surrounding Brexit.

“It is increasingly apparent at this stage that it may take some time before the necessary trade arrangements are concluded,” he says.

Until that happens, variables such as exchange rates, stock market returns, producer and consumer sentiment may continue to display heightened volatility. This, inevitably, impacts on our assessment of the trade performance of the Irish economy.

Read: MP says Russian hackers probably influenced Brexit vote >

Read: Warnings that any Brexit carnage on UK economy could be ‘magnified’ in Ireland >

About the author:

Rónán Duffy

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