THE IRISH ECONOMY is “on the way back”, according to business group IBEC, which says the recovery is not just well under way, but is gaining momentum.
In its new forecast for this year which is published today, IBEC revised upwards its projections for consumer spending, investment in the economy, and GDP growth.
The group had previously predicted that consumer spending will increase by 1.3 per cent this year, but has now revised this to 1.9 per cent, based on a boost in consumer sentiment and good employment news.
On the jobs front, IBEC predicts that unemployment will drop to 10.9 per cent this year, with around 50,000 new jobs to be created. The current unemployment rate is 11.8 per cent.
The group dismissed the poor GDP figures from last year and said that they don’t represent the “true strength of the real economy,” which it said could be seen in “massive” employment growth and the strengthening of the domestic economy.
It blamed the pharma ‘patent cliff’ – the clustering of a large number of patented drugs going off-patent in quick succession – for having a disproportionately bad effect on Irish exports, wiping almost €5 billion off them last year alone.
“The recovery is gaining momentum, with spectacular employment growth in the private sector and strong increases in consumer confidence, business confidence and investment,” said economist Fergal O’Brien of IBEC.
Ireland is on the way back. We are now out-performing many of our European competitors.
He said that the upswing in the economy’s fortunes means Minister for Finance Michael Noonan should consider reducing income tax in the next budget.
He also cited wage pressures and a fragile European recovery as being a concern.
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