Investec pares growth forecasts as it predicts export boom will slow

Good year: exports rose 8.9pc with the trade surplus at a record high of €1bn a week. Stock image
Good year: exports rose 8.9pc with the trade surplus at a record high of €1bn a week. Stock image

The economy will grow more slowly than expected this year in large part due to a weaker export environment, according to the latest forecasts from Investec.

The bank and asset management company trimmed its forecast for this year to 4.3pc growth from 4.5pc and its 2020 outlook to 3.3pc from 3.8pc.

“While these are slower rates of expansion than what we have seen in recent years, they are still comfortably above trend,” chief economist Philip O’Sullivan said in a his latest report.

“In any event, a moderation is not unwelcome given how the combination of buoyant growth and diminishing ‘slack’ in the economy was starting to nibble away at Ireland’s competitiveness.”

Buoyant global demand and surging exports have propelled growth here to the top of the EU table and with record numbers in work and rising wages, concerns were growing that the economy was on the verge of overheating.

Even the lower forecasts from Investec will still see the country at the top of the EU range as major economies like Germany and France have seen their economies slow sharply.

Exports enjoyed a vintage 2018 rising 8.9pc, Mr O’Sullivan said, with the trade surplus reaching an all-time high of close to €1bn a week.

The new Investec forecasts assume there will be a Brexit deal, although with the formal deadline for an agreement between the UK and the EU fast approaching, the risks of a no-deal exit have risen sharply.

Thanks to rising wages, up 4.1pc, and an economy adding 1,000 jobs a week, the Irish consumer is set to take up some of the slack from the slower pace of exports.

Irish Independent


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