Ireland is fastest growing economy in Europe once again

Ireland is once again Europe's fastest growing economy.

GDP growth rate is at 5% for 2017.

Consumer spending is to accelerate to 3.4% and house price inflation is up to 10% for this year.

Author of the report Conall MacCoille of Davy Research says Brexit is still putting Ireland at risk.

"That danger of a cliff-edge Brexit where WTO tariffs will be imposed is certainly still there.

"That would hit the economy in 2019 and that could lead to effectively, flat-growth or in a worse case scenario a recession," he said.

In summary key take outs of Davy’s revised forecasts for the Irish economy include:
· Irish GDP forecast - to grow by 5% (up from prior 3.7% forecast) in 2017 and by 3.8% in 2018.
· That would likely make Ireland Europe’s fastest growing economy again this year.
· Davy’s base case on Brexit is that a transitional Brexit deal will be agreed to avoid the worst case scenario of a hard Brexit and WTO tariffs - though clearly that risk remains, with very real consequences for agri, for SMEs and indigenous manufacturers, most likely in 2019.
· They see consumer spending accelerating to 3.4% growth in 2017 (up from prior 3.0% forecast).
· House price inflation for FY 2017 of 10% (up from Davy’s prior 8% view at the start of the year).
· Employment to expand by 2.8% in 2017 and 2.3% in 2018, sufficient to push the unemployment rate to 5.3% on average next year..
· Underlying investment should remain robust, up 8.4% in 2017.
· Government expenditure predicated to rise by 2.6% in real terms in 2017.
· Export growth to pick up from 2.4% in 2016 to 4.5% in 2017 and 4.4% in 2018.