Last year’s economic momentum has carried into the opening half of 2017. GDP growth has accelerated to 6.1% per annum – compared with 2.4% across the EU - and consumer expenditure is making a significant contribution to this. As shown in Figure 1 total spending on goods and services is now comfortably above previous peak levels. The ultimate source of this is jobs growth. Ireland is currently creating nearly 70,000 additional jobs per annum - the fastest rate of employment growth in almost a decade. As a result unemployment has fallen to 6.4%, leading to a more competitive labour market and a sustained period of modest but meaningful earnings growth. Rising employment has also taken pressure off the public finances, creating fiscal space for modest tax cuts in the last two budgets and raising the prospect of further concessions in October. All of this has fed into a 4.0% increase in real household disposable incomes over the last 12 months. Adding to this, sustained growth in consumer credit balances has further boosted consumers’ spending power. Looking ahead, despite continued global uncertainty, the current strength of Ireland’s economy has led forecasting institutions to raise their GDP growth projections. A simple average of these suggests growth rates of 4.1% and 3.5% in 2017 and 2018 respectively.
Source : Savills