Wednesday, August 13 10:54:21
Davy has revised upwards its forecast for Irish economic for this year and next, citing a rebound in the domestic economy and increased investment.
In a new set of forecasts for the Irish economy, Davy expect Irish GDP to expand by 3.5pc in 2014, 3pc in 2015 and 2.8pc in 2016, becoming the fastest growing economy in the EU.
It said that the clear recovery in the domestic economy should become apparent in GDP growth this year, artificially depressed by poor export performance among multinationals last year.
The recovery, it said, will also be more broad-based as consumer spending and investment growth accelerate.
The forecast predicts that the government deficit will fall to 2.9pc of GDP next year based on a €500m adjustment in Budget 2015.
"The big picture is that the temporary negative impact of the pharmaceutical patent cliff is now waning. The clear recovery in the domestic economy should become apparent in GDP growth in 2014, artificially depressed by poor export performance among multinationals last year. With GDP growth envisaged to be close to 3pc thereafter, Irish GDP in real terms will return to pre-recession peak levels by 2016."
It predicts that employment will grow by 2.8pc this year and by 2.3pc next year, while unemployment is predicted to fall to 9.6pc in 2015 and to 8.6pc in 2016.
Davy said that only 8,000 house were built last year adding that its forecasts are based on housing completions rising back to almost 15,000 in 2016. While this is a substantial increase on recent years, it is still below the 25,000 a year necessary to satisfy "natural demographic demand".
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