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Panorama of Dublin's Grand Canal Dock at night. The area is known as Silicon Docks due to many tech companies locating here. Alamy Stock Photo
Economic Forecast

Worldwide tech job cuts having ‘no visible impact’ on Irish labour market

The European Commission has revised upwards its forecasts for economic growth this year in Ireland.

WORLDWIDE JOB LOSSES in multinational technology companies are yet to have any visible impact on Ireland’s labour market, a European Commission economic report has said.

The EC’s Winter 2023 Economic Forecast has predicted the Irish economy will grow in GDP terms by 4.9% this year, compared with its autumn forecast of 3.2%.

Growth next year has been revised upwards to 4.1% compared to an earlier forecast of 3.1%.

The report said: “Real GDP in Ireland grew by 2.3% q-o-q (quarter on quarter) in the third quarter of 2022, much stronger than anticipated.

“Investment increased by 92% q-o-q, driven by multinational corporations’ investment in intellectual property.

“Exports of both goods and services kept on expanding robustly and private consumption grew despite downbeat consumer sentiment.”

The report added: “Going forward, sentiment indicators point to an improving outlook, partly driven by falling inflation towards the end of the year.

“The Irish labour market continues to perform very well, with the unemployment rate at 4.3% in December.

“Despite news on some big tech companies reducing their staff worldwide in autumn, with yet no visible negative impact in Ireland where the multinational sector has increased employment in 2022 by 9%.”

“Employment expectations in December were also improving.

“A strong labour market together with very high household savings underpin further private consumption growth.

“Foreign investment in the first half of 2023 is set to be strong, as signalled by Ireland’s Industrial Development Authority, while a slightly brighter global outlook is set to support exports.

“Real GDP growth for 2023 is revised upwards to 4.9% compared to the autumn, and it is thereafter expected to expand by 4.1% in 2024.”

The report also predicts inflation in Ireland will fall this year to 4.4%, before dropping to 2.1% next year.

It said: “HICP (Harmonised Index of Consumer Prices) inflation peaked in October 2022 and has been easing since.

“Energy remains the main driver for inflation, although it has started moderating.

“By contrast, growth in food prices reached double digits in the final quarter of 2022.

“Inflationary pressures in non-energy industrial goods and services, while elevated compared to the previous years, have moderated in recent months.

“Inflation reached 8.1% in 2022 overall.

“It is set to remain high at the beginning of this year and to gradually subside thereafter, to 4.4% in 2023 as a whole and 2.1% in 2024.

“Ireland’s economic outlook remains subject to uncertainty due to trade developments related to the implementation of the Protocol on Ireland/Northern Ireland.

“Furthermore, the performance of multinational corporations could swing growth in either direction.”

Author
Press Association
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