Irish economy continues to outpace the rest of the EU

Ireland’s economy is forecast to continue to outpace the rest of the European Union (EU), with tens of thousands of new jobs created across a host of sectors by 2020, according to the Economic Eye Winter Forecast from EY.

It’s predicted that the Irish economy will grow by 3.1 per cent in 2016, followed by 2.9 per cent in 2017, based on growth on gross value added.

In fact, the forecast states that the economy will experience average annual growth of 2.7 per cent between 2016 and 2020, buoyed by consumer spending and increased employment opportunities.

The forecast shows that while the number of civil servants is likely to remain unchanged during the next four years, there will be considerable job creation in the health and education (14,000 jobs), retail (24,000 jobs) construction (21,000 jobs) and information and communications (10,700 jobs) sectors respectively.

On the flip side, it’s forecast that the agricultural sector could see 10,500 jobs lost by 2020, due in no small part to the challenging conditions post-EU referendum.

Neil Gibson, economic adviser to the EY report, said: “With uncertainty ahead of us, any economic forecasts must be highly conditional at this point, and that is likely to be the case for at least the first half of 2017 as divorce negotiations between the UK and the EU continue.

“However, the island economy, and the Republic in particular, enters this turbulent period in ruder health than might have been expected, with employment rising and growth in Ireland continuing to top the European charts.”

The report suggests that growth in Ireland will be largely strong compared to Northern Ireland and the rest of the UK, underpinned by consumer and investment spending, which EY believes will provide a suitable buffer against slower government spending.

“Consumers … are expected to power ahead with their spending, having emerged in 2014 from a downturn in consumer spending,” the report added.

Date published 19 Dec 2016 | Last updated 19 Dec 2016