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Dublin: 13°C Tuesday 24 November 2020

Ireland will outperform eurozone despite dip in exports - Ulster Bank

Ulster Bank also says we could be presented with the need for a mini-Budget, but advises against introducing one.

Image: Julien Behal/PA Wire

IRELAND’S EXPORT SECTOR will take a hit this year as the economies of other eurozone countries take a hit – but we’ll still outperform the economies of other eurozone countries in terms of overall growth.

That’s the verdict of Ulster Bank, which says Ireland’s economy will grow by 0.2 per cent next year while the economy of the eurozone as a whole falls by 0.3 per cent.

The bank’s quarterly Irish Economic Outlook bulletin added, however, that this expectation for 0.2 per cent growth was far lower than the estimate put forward by the Department of Finance itself – meaning Ireland could fall short of Troika deficit targets.

Similar worries were raised in reports by the European Commission and the International Monetary Fund released last week, when the former in particular suggested a mini-Budget could be needed later this year to meet those targets.

“We are not in favour of such action,” Ulster Bank says, saying Ireland’s previous record of meeting its targets means any future slippage would be seen as the fault of the global economy rather than waning commitment on Ireland’s behalf.

On the positive side, however, projections that Ireland’s economy would grow positively this year put Ireland ahead of eight other eurozone countries, with larger economies like the Netherlands, Spain and Italy all set to shrink this year.

The report also suggested that domestic demand would remain underwhelming, with the modest economic growth in Ireland unable to sustain any significant job creation as unemployment rises to 14.6 per cent.

Read: IMF: Irish economy faces larger challenges than first expected

More: Ireland may need mini-budget if other economies falter: official EU report

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Gavan Reilly

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