World Economy

OECD Lowers Irish Economic Growth for Two Years

OECD Lowers Irish Economic Growth for Two YearsOECD Lowers Irish Economic Growth for Two Years

The OECD on Tuesday forecast that the Irish economy will grow by 4% this year, and by 2.9% next. This is lower than the forecasts of 4.7% for 2018, and 3.9% for 2019, published on Monday by the Economic and Social Research Institute.

Survey from the Organization for Economic Cooperation and Development also found that countries such as Ireland could be “more severely affected” by a hard Brexit, IINA reported.

Elsewhere, continuing, “robust” economic growth is predicted for the EU this year and next, the OECD said, as GDP growth is projected to average slightly above 2% per annum in the region in 2018-19.

“Rising employment should boost incomes and support private consumption, as wages are expected to rise faster than in the past,” the survey said. “High business confidence, increasing corporate profitability and encouraging global demand should keep supporting investment.”

The economic survey, European Union 2018”,published in Brussels said: “After years of crisis, the European economy has robustly expanded in 2017 , helped by very accommodative monetary policy, mildly expansionary fiscal policy and a recovering global economy.”

But the report warns that the union must use the opportunity to focus on long-term challenges, specifically social and economic inequality—”wellbeing disparities”—the effect of Brexit, low potential growth, an ageing population and continuous technological developments.

It says that the overall effect of a hard Brexit is not considered a major macro-economic risk for the EU and is manageable if preparations for all scenarios are made. But countries like Ireland would be more severely affected.

The report warns that moving from a wholesale banking sector, that is centered in London, to a potentially more fragmented banking landscape might increase the cost of capital for households and non-financial corporations, as the economies of scale and scope of the London industry may diminish. “In this respect, the EU should see the UK departure from the EU as an opportunity to advance faster on the Capital Markets Union.”

The report also warns that the single market remains “fragmented”, with barriers in key areas including services, transport, finance, energy and digital markets. Now is the time to build on national reforms to ensure that women, youth, older workers and migrants are integrated in the labor market.



Add new comment

Read our comment policy before posting your viewpoints