Monday, August 25 10:12:57
Ulster Bank's economists became the latest to upgrade their economic forecasts for Ireland, predicting 3.1pc GDP growth this year compared to the previous 2pc forecast.
Its latest Economic Outlook Report said that recovery is gathering strength and becoming more broadly based.
It said that 2014 will mark the first year since 2007 that exports, consumer spending and investment will all be growing together - an important sign that the recovery is looking more sustainable.
"The improvement underway in international growth patterns supports the outlook for Irish exports where recent momentum has been impressive Meanwhile, the ongoing improvement in the labour market is a key barometer of a better domestic economy. We note that over half of all the jobs created over the past two years were recorded outside of Dublin, indicating that the labour market recovery itself has a breadth to it that extends beyond the capital," it said.
Ulster Bank expects a continuation of solid growth of 3.2pc in 2015.
"We expect the unusually large gap between growth in GDP and GNP of late to narrow, and expect GNP to also grow by over 3pc this year and next."
The main driver of the stronger near-term outlook is a much improved export performance, aided by the combination of improved growth momentum in Ireland's main trading partners (especially in the UK and US) and better trends in the pharma-chem sector as the drag from the patent cliff looks to have eased. From a subdued 1.1pc annual gain in 2013, we expect Irish export volumes to grow by around 5pc this year, it said.
"In addition to positive export growth, we also expect both consumer spending and investment to expand in 2014, marking the first year since 2007 that each of these three key areas of spending will all be growing together."
However, it remains disappointed with consumer spending volumes.
"However, having declined by 0.8pc in 2013, we expect a return to positive growth of over 1pc in 2014, and a further acceleration to 2pc in 2015, with more timely indicators on car and non-car retailing as well as consumer confidence broadly pointing to better trends of late. The expected improvement relative to last year is being driven by the strength in key labour market trends with solidly expanding employment now beginning to underpin better underlying income dynamics for the Irish household sector." For more visit: www.businessworld.ie