Statistics Suggest a Substantial Recovery for the Irish Economy
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Recent data published in regards to the Irish economy has suggested that a significant recovery may be in the cards for the country this year. Several vital factors throughout Ireland have had a positive impact on the growth forecast. Unexpected levels of high performance in underlying tax revenues, steady increases in employment levels, and reliable trends surfacing in the retail sector have all pushed numbers up.
Recent data published in regards to the Irish economy has suggested that a significant recovery may be in the cards for the country this year. Several vital factors throughout Ireland have had a positive impact on the growth forecast. Unexpected levels of high performance in underlying tax revenues, steady increases in employment levels, and reliable trends surfacing in the retail sector have all pushed numbers up.
The data also suggests that the Irish consumer may be making a comeback. According to Investec’s latest report for the Irish Economy Monitor, the wide nature of the country’s recovery shows in that all three PMIs (purchasing managers’ index) have been above 50 since September of last year. These three PMIs include the services and manufacturing industry, as well as the construction PMI.
Ireland’s Domestic Economy
Although overall exports continue to play an important part in driving growth upwards throughout Ireland, it is important to note the meaningful upturn in the domestic economy. Evidence suggests that the average Irish consumer is making a comeback, and retail sales have provided eleven consecutive months of annual growth, in volume and value.
Experts suggest that this upturn has been encouraged by luxury or ‘big ticket’ items. For example, about 89,915 private cars licensed during the first ten months of 2014 equals a greater annual total than any year since 2008. According to the chief economist with Investec Ireland, Philip O’Sullivan, the Consumer Confidence index reached its highest level since January 2007 in September. The unemployment rate also continues to fall, helping Ireland’s future look bright.
The Future for Ireland’s Economy
In light of the recent statistics, Investec altered their forecast for GDP growth to 4.8% during 2014, 3.5% in 2015, and 2.9% in 2016. Before now, the forecasts were 2.5%, 2.8%, and 2.5%. The estimates for consumption are up from 1.4% to 1.7%, because of positive trends in retail.
Despite the positivity within the country, experts are advising caution, noting that Ireland’s economy is not without some risk. Although unemployment and household debt are moving in the correct direction, they are still high in absolute terms. What’s more, the weaker prospects for the Eurozone are likely to have a negative effect on Ireland, despite many Irish firms that may benefit from economic expansion in the UK and US, as well as favorable FX moves.
