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Ulster Bank cuts Irish growth forecast

Friday, March 08 11:43:12

A forecast for Irish economic growth was today revised down by Ulster Bank as international growth prospects continue to be marked lower.

Economist, Simon Barry, estimates 2013 Irish GDP growth at 1.2pc compared to his previous forecast of 1.5pc.

GDP was 0.5pc in 2012, with the failure to build on the 1.4pc recorded in 2011 due primarily to a marked deterioration in growth dynamics in several of Ireland's key trading partners which has translated into weaker, though still positive, Irish export growth, he said.

"We continue to expect a mild re-acceleration in Irish GDP growth from this year as European economic weakness eases relative to last year. However, we have pared back our projections somewhat to allow for a downgraded international outlook, with 2013 growth expectations for both the euro zone and UK economies having been scaled back by about half a percentage point over the past six months. We now look for Irish GDP growth of 1.2pc for this year (1.5pc previously), and 1.9pc for 2014 (was 2.4pc), keeping us on the low side of the prevailing consensus. While still a sluggish outlook, this would still leave Ireland with the third fastest growth rate of the 17 countries in the euro zone for the coming year - highlighting what is, in relative terms at least, a resilient performance."

"The consistent pattern of downward revisions to growth expectations internationally serves to highlight that the overall balance of risks to the Irish outlook remains tilted to the downside, though there are some upside risks too, including from buoyant FDI flows, past gains in competitiveness and improving domestic demand."