Monday, July 28 11:41:06
The Central Bank today increased its economic growth forecast for 2014 to 2.5pc from 2pc, citing better than expected export growth underpinning a recovery beginning to firmly take hold.
The economy expanded 2.7 percent in the first quarter, having been stuck in neutral for the last two years. The central bank reiterated that the economy has now broadly stabilised and domestic demand will contribute to growth this year.
The government has said the brighter picture means it can ease back on planned austerity measures this year.
The central bank said that while the amount of spending cuts and tax hikes required may be less than anticipated, ministers must tread carefully.
"Continuing to build on the achievements of recent years will be crucial in order to reduce vulnerabilities and ensure a sustainable return to steady growth," the central bank said in its quarterly bulletin, referring to Ireland's six years of austerity cuts.
Economists polled by Reuters see the economy growing by 2.3 percent this year, more than the 2.1 percent expansion the government predicted when it last updated its forecasts in April.
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