THE IRISH ECONOMY has turned the corner and domestic demand has increased for the first time since the economic crisis.

That is the conclusion made today by the Economic and Social Research Institute in its latest quarterly outlook.

The ESRI has predicted that GNP will grow by 2.7 per cent  next year on top of growth of 2 per cent this year.

This is being driven they say by growth of 0.9 per cent in domestic demand this year, the first increase since the crisis began.

GNP is the value of economic output minus the value of goods and services produced by multinationals.

The think-tank say that the labour market is the most most useful indicator as to what is happening in the Irish economy today, in large part because of the ending of pharmaceutical patents of companies based here.

As a result of what they describe as “substantial” employment growth over the past year, the ESRI are revising upwards their estimate of employment growth for 2013, predicting overall growth of 2.4 per cent.

They predict that unemployment will fall to 12 per cent next year.

It is also “likely”, the ESRI conclude, that Government borrowing for this year will be less than what had been targeted.

Next year they predict that the the higher growth forecast for GNP will lead to the general government deficit falling further to around 4.4 per cent of GDP.

This is less than the Government’s target of 4.7 per cent of GDP with Finance Minister Michael Noonan also saying yesterday that the deficit is likely to be less than the Government’s prediction, leading to a possible easing of spending cuts next year.

Read: We don’t intend to lose the discipline that’s been put in the system by the Troika – Taoiseach >

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