Irelands Short -Term Economic Outlook Quarterly Economic Commentary - - PowerPoint PPT Presentation

Ireland’s Short-Term Economic Outlook

Quarterly Economic Commentary Summer 2015

• Dr. David Duffy

Outlook

 GNP to increase by 4.2% in 2015 and 3.6% in

2016

 Domestic demand and labour market

recoveries continuing

 Exports supported by growth in trading

partners and by the weak Euro

 General Government Deficit of 2.3% this year,

1.2% in 2016

Real GNP to grow by 4.2% in 2015 and by 3.6% in 2016

• 10
• 8
• 6
• 4
• 2

2 4 6 2009 2010 2011 2012 2013 2014 2015 2016 GDP GNP

Continuing improvement anticipated in labour market

1,600 1,700 1,800 1,900 2,000 2,100 2,200 0% 2% 4% 6% 8% 10% 12% 14% 16% Employment to reach approx. 2 million by Q2 2016 Unemployment rate to be

• approx. 8% by end-2016

Growth in personal consumption to increase

 Consumption growth

increasing

 1.1% in 2014, forecast 2% in

2015, 2.4% in 2016

 Reflects increase in

aggregate incomes

 mainly due to employment

growth

 Consumer sentiment also

improving

 Deleveraging continues to

act as a drag on consumption

• 6
• 5
• 4
• 3
• 2
• 1

1 2 3 2009 2011 2013 2015 Annual % change, volume

Investment will be an important driver of growth

 Investment rate at all-time

low in last 3 years

 Increase in housing output



Strong growth, but levels remain low

 Continued FDI to contribute

to increase in other b & c

 Low interest rates, high

company savings, improving economic prospects, undertake previously deferred investment

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• 20
• 15
• 10
• 5

5 10 15

2009 2011 2013 2015

Annual % change Overall investment (volume) to increase by 13 per cent in 2015, and 9 per cent in 2016

Contribution to growth

Percentage points

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• 10
• 8
• 6
• 4
• 2

2 4 6 8 10 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Domestic demand Net Trade GNP

Economic Assessment

 Strong recovery set to continue in 2015, 2016

 Growth of 4.2%, 3.6%  Nowcasting shows 1% growth in both Q1 and Q2  2016 unemployment 8.3% (annual average)

 Strong foreign demand

 Euro area improving but remains a downside risk

 Investment still set to contribute strongly

 2015 housing supply to be weaker than expected

 Consumption growth supported by rising

sentiment, employment and incomes