Ireland’s economy is growing at a blistering pace with the latest National Accounts showing annual GDP growth of 7.8%. Robust exports in recent years have laid the foundation for a broader, domestically driven, recovery which is now firmly taking shape. 44,000 new jobs have been created in the last 12 months, with full-time employment rising by 2.4%. As a result unemployment is down to a 7-year low and, inevitably, this has caused a pick-up in earnings. Combined with modest tax cuts and cheaper commodities, this is boosting disposable incomes and contributing to improved sentiment and stronger domestic demand.
While the economic outlook for Ireland remains very positive there are, as ever, some qualifications. Construction output has lagged the recovery, edging up by just 3.5% in the last year. Further afield, there are signs that the global economy has weakened. Slower growth in China, tight Government spending in many countries, falling export prices in commodity producing economies, and political uncertainties such as the Brexit referendum have all contributed to this. Consequently the OECD has reduced its global GDP growth forecast from 3.3% last November to 3.0% in February. As a small open economy Ireland is exposed to these factors. Nonetheless, given the rebound in domestic demand, the resilience of Ireland’s FDI model and the likelihood of a competitive Euro in the longer run, consensus forecasts are for further jobs growth of around 43,000 per annum and output growth of 4.4% in 2016 and 3.7% in 2017.
Source : Savills