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Ireland Economy Strongest in EU

Ireland Economy Strongest in EUIreland Economy Strongest in EU

Davy Stockbrokers have Monday predicted that Ireland’s GDP will grow by 3.7% in 2017. This is a minor downward revision from 4.0% previously but still likely to be the strongest growth across Europe in 2017.

Exports have been weaker than expected since Davy’s last forecast, so GDP growth in 2016 is expected to be 4.8% versus their previous forecast of 6.0%, Business World reported.

However, the recovery in domestic demand remains strong and jobs growth has been robust through 2016. Davy expect consumer spending to grow by 3.0% in 2017. They believe housing construction and resilient foreign direct investment will help investment grow by 6.8% in 2017–benefitting Irish domestic banks and the REIT sector.

Furthermore, they expect house prices to rise by 8% in 2017, fuelled by the government’s Help-to-Buy scheme and a loosening of the Central Bank mortgage lending rules.

According to Davy Stockbrokers, “It remains to be seen how markets will react to the UK invoking Article 50 in early 2017. A sharp depreciation of sterling remains a risk for export competitiveness, albeit offset by the dollar’s strength. Although not our base case, a key risk is that a ‘hard Brexit’ will emerge with the UK potentially facing a disorderly exit from the single market in early 2019.”

They added, “Such a scenario could lead to severe disruption for Ireland’s export sector–potentially leading to tariffs being imposed together with regulatory and legal uncertainties on trade with the UK.”

 

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