We are not that far into 2018 – but we are already getting positive forecasts for the Irish economy in 2019.
This week (Jan 24th 2018 ) the Irish Central Bank published it’s usual quarterly bulletin.
The first bulletin of 2018 reported that the Irish economy continues to perform strongly – and they have forecast a GDP growth of 4.4% in 2018 .
The Bank forecasts a small drop in GDP growth to 3.9% in 2019 – they say this will be as a result of getting closer to full employment and also the slowing of growth in our trading partners.
The Central Bank forecasts that employment will grow by 2.2% in 2018 and by 1.8% in 2019. This would see an extra 89,000 people in work and overall employment levels at 2.3 million, in excess of the 2007 peak level.
Inflation is forecast to rise to 0.7% in 2018 and 0.9% in 2019 .
Average earnings are expected to increase by 3.2% this year and 3.4% in 2019.
Mark Cassidy, the Central Bank’s Director of Economics and Statistics, said: “The outlook for Ireland’s economy is largely positive, driven by broad-based growth in employment, which has boosted incomes and consumer spending.”
But he also pointed out that the forecast economic growth will not necessarily be plain sailing because the small and open nature of our economy leaves us particularly vulnerable. Two of the main potential problems will be the present uncertainty in the global corporate taxation environment and of course Brexit and it’s effect on future trading conditions with the UK.
Hopefully this growth in the economy will be reflected in increased spending in Budget 2019. Six years of low spending has resulted in a backlog of capital investment projects .
(An inadequate supply of infrastructure was perceived as the most important barrier for doing business in Ireland – in a recent survey by the World Economic Forum.)
The IMF recently produced a report that estimated an “efficiency gap” of 58% in investment in key areas such as education, health, electricity, roads and water – compared to advanced countries.
Budget 2019 won’t be announced until October of 2018 – we expect to see some increased spending outlined in it.