Ireland’s economy is set to grow at double the rate of the world economy this year and outpace all major economies except India and China next year.
m.independent.ie
Ireland’s economy is set to grow at double the rate of the world economy this year and outpace all major economies except India and China next year.
The International Monetary Fund predicts that gross domestic product (GDP) – which includes all multinational transactions – will expand by 5.6pc this year and 4pc next year.
The Washington-based lender said Irish inflation should fall back to 5pc this year and to 3.2pc in 2024, with unemployment to remain at a low of 4.5pc for the next two years.
Its growth outlook for 2024 is less upbeat than the Economic and Social Research Institute (ESRI), which warned that the Irish economy could be in danger of overheating as GDP growth surges to 6pc in 2024.
“We feel, in general, that the outturn is going to be a bit better next year than this year, mainly to do with the inflation story,” said ESRI research professor Kieran McQuinn.
“Inflation is going to come down. Last year there was quite a lot of talk about the possibility of an international recession. The fact that that has died down is good news, as far as the Irish economy is concerned.
In its latest economic outlook, the IMF warned of a “rocky recovery” for the global economy, slightly downgrading its GDP growth forecast to 2.8pc in 2023 and 3pc in 2024. Global inflation is expected to fall more slowly than anticipated, the fund said.
The UK and Germany face a mild recession this year, while Russian growth is expected to turn positive after contracting by more than 2pc last year.
US GDP is expected to grow by 1.6pc in 2023 and 1.1pc in 2024, while euro area growth will stagnate at 0.8pc this year before recovering to 1.4pc next year.
However, the fund warned that there is a small risk of a “severe downside scenario” where global growth slows to 1pc on the back of banking sector frailty and even higher interest rates.
“Nervous investors often look for the next weakest link, as they did with Credit Suisse, a globally systemic but ailing European bank,” said IMF economist Pierre-Olivier Gourinchas at the start of the IMF’s annual spring meetings in Washington.
He warned governments to rein in spending as central banks work harder to tame inflation.
Finance Minister Michael McGrath, who is in Washington for the meetings, is to publish a paper next week setting out options for a new long-term reserve fund to hold and reinvest excess corporation tax receipts, which could help fund future pensions.
“A huge amount of these windfall receipts are still coming in,” the ESRI’s Kieran McQuinn said.
“There is a danger that the collapse of these windfall receipts could leave a huge gap in the public finances.”
Obviously only ignorance follows populism
