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Ireland's economy should be grand (as long as there isn't a Brexit)

The ESRI is predicting 4.6% growth this year and 4.2% growth next year.

Taoiseach Enda Kenny has been active in campaigning for the Vote Remain side
Taoiseach Enda Kenny has been active in campaigning for the Vote Remain side
Image: Sam Boal/RollingNews.ie

THE OUTLOOK FOR Ireland’s economy is looking pretty good, according to a major think tank.

That is, of course, on condition that a Brexit does not go ahead.

According to a new report from the Economic and Social Research Institute (ESRI), we should see growth of 4.6% this year and 4.2% in 2017.

Speaking at the institute’s Budget Perspectives seminar earlier this month, author Kieran McQuinn said that in the case of a leave vote in the UK referendum on Thursday would inevitably result in “lower output expectation”.

“There are indications that the slowdown in global trade, coupled with the uncertainty surrounding the outcome of the Brexit referendum in the UK, is having an adverse impact on the traded sector of the Irish economy,” said McQuinn.

These are the main downside risks to the Irish economy at present.

EU referendum Prominent Brexit campaigner Boris Johnson Source: Dominic Lipinski/PA Wire

‘Significant growth’ 

The steady expansion predicted by the ESRI is a marked slowdown on last year’s performance.

Growth in 2015 hit 7.8% – the best year since 2000 – making Ireland the fastest growing economy in Europe.

Other major institutions have made similar predictions for how things will shape up over the next 18 months.

Back in April, the Central Bank more optimistically forecasted 5.1% growth in 2016, with domestic demand being the main driver of expansion.

At the last budget the government projected growth at 4.3% for 2016 and 3.5% for 2017.

Speaking about the expansion of Ireland’s economy, Kieran McQuinn said that it was “significant growth”, especially in comparison with other European economies.

Where is all this growth coming from? 

The ESRI’s study predicts that it is domestic factors that are likely to drive things forward.

Speaking about the results, co-editor David Duffy said:

It is now clear that domestic sources of growth, investment and consumption are the main determinants of the increase expected in Irish economic activity.

While there is major demand for housing supply in Ireland, Duffy also stated that as of yet there was no clear indicator that stock was growing faster than it did last year.

The new report has also projected that unemployment will fall to 7.6% by the end of this year and to 6.5% by the end of next year.

Read: Older people moving to smaller houses might help housing crisis

Also: Almost 100,000 Irish homes are still in negative equity…

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