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Irish Economy - Slight downgrade to government's economic projections

Tom McCabe • 24/04/2024

Solid medium term growth still expected

Earlier today the government published its revised medium forecasts for the Irish economy and despite a modest GDP downgrade for 2024, the overall economic outlook remains a solid one. Below we’ve outlined our key messages together with these latest forecasts.

  • Real GDP growth forecasts are downgraded somewhat, particularly for 2024 (from 4.5% to 2.9%). As in common with other forecasts from the ESRI and Central Bank, the downgrade has stemmed somewhat from weaker assumptions about export growth following a weaker tone to exports in the last 12 months.
  • On the whole however, real GDP growth is still forecast to come in at 2-4% for 2024 and 2025 – an excellent result given the broader European economic picture.
  • The domestic economy is expected to remain robust with consumer spending and modified domestic demand (a proxy for growth in the domestic economy) forecast to grow by 2.4% and 1.9% respectively in 2024
  • Unemployment is forecast to rise gently to 4.6% this year and stay at around those levels in 2025. In reality a small pick-up in unemployment may not be a bad outcome given how tight the labour market is at present as it reduces the risk of excessive wage growth feeding into broader Irish inflation dynamics.
  • All in all, the forecasts indicate a continued positive macro environment for the real estate market, boosted further by the growing likelihood the ECB will begin to lower interest rates in the second half of 2024

Irish Goverment Economic

Author / Contact

Tom McCabe
Tom McCabe

Director, Head of Research & Insights • Dublin

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