Merrion Economics: Irish Quarterly Economic Outlook (October, 2015)
Merrion is releasing its latest Irish Quarterly Economic Outlook this morning
Irish Quarterly Economic Outlook (October, 2015)
- GDP forecast to be up 6.0% in real terms this year and 5.0% in 2016
- Broad-based recovery through buoyant exports and stronger domestic demand
- Unemployment rate to average 9.6% in 2015, down from 11.3% last year
- House prices to post average rise of 11.0% this year
- Budget deficit to fall to just 2.0% of GDP in 2015
- Political mis-management the biggest risk to the economy in the short-term
Global Economy: The outlook for the global economy remains very uncertain. China’s slowdown, the downward bias in commodity prices and the renewed increase in financial market turbulence point to further weakness in the short-term. The simple fact of the matter is that there are not enough growth engines around the world. Indeed, of the major world economies, only the US, the UK and India can be considered relative outperformers, countries which appear to be the most resilient and have the potential to generate stronger, and more importantly, more sustainable activity. But from an Irish perspective, while the world economy as a whole may be stuttering, its key trading partners are among the shining lights on the global stage which will in our view only help to keep Ireland at the top of the Eurozone growth league table for another couple of years at least.
Irish GDP: The Irish economy continued to perform very strongly in the second quarter of 2015. GDP was up 1.9% in the quarter and 6.7% in the year, more than twice that of the latest figures from Spain, the next strongest Eurozone performer. First quarter GDP growth was also revised up to 7.2% from 6.5% previously, mainly due to higher fixed investment than originally estimated. In the first half of the year, average GDP growth was 7.0% in real terms. It is quite clear from these latest figures that Ireland will easily top the Eurozone growth league table again this year. Based on the numbers for the first half of the year and even allowing for some slowdown in the second half because of weaker global activity, average GDP growth for 2015 as a whole is likely to be around 6.0% if not more.