The latest set of forecasts published by the European Commission (EC) yesterday predicts that the Irish economy will grow by 4.9% in 2016. This is up from its previous estimate of 4.5%
GDP is expected to grow by 3.5% in 2017.
This puts Ireland at the top of the growth league table in all of Europe yet again. For the euro area, the EC expects growth of 1.6% in 2016. This is down from its Winter forecast of 1.7% and is, in fact, modestly above current consensus forecasts, suggesting that there may be further downside risks.
The most significant forecast reductions came in Netherlands (from 2.1% to 1.7%), Italy (from 1.4% to 1.1%) and Germany (from 1.8% to 1.6%). Forecasts for France were left unchanged but growth of just 1.4% is expected there.
According to Goodbody Stockbrokers, "The Irish economy has clear domestic momentum, but needs some help from the international environment if this solid performance is to be maintained in the
medium-term. With forecasts also being reduced in the UK, it is certainly not getting that help from Europe."