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External risks to Irish economic growth are increasing, economist warns

External risks to Irish economic growth are increasing, economist warns

Upcoming national elections across Europe could ratchet up the external pressure on the Irish economy - already under threat from Brexit, potential global trade wars, and US corporate tax policy changes - an economist has warned.

Economist Alan McQuaid said pending votes in Poland, Portugal and Greece - on top of ongoing political uncertainty in Italy - are potential threats to the EU, and, in turn, could have implications for sustained Irish growth.

Speaking at a conference held by accountancy body Acca, Mr McQuaid also warned of a so-called 'Japanification' of the eurozone, with interest rates set to remain close to zero just as they have done in Japan for the last 20 years.

He noted that the nine recent rate rises enacted by the US Federal Reserve have given it the room to cut rates should the US economy need a boost.

The changing of top brass at the ECB - including the departure of president Mario Draghi and executive board member Benoit Coeuré - could impact eurozone interest rate policy, Mr McQuaid said.

While he sees Irish economic growth being sustained "in the next few years" he noted household debt remains the fourth highest in the EU, despite significant decline in recent years.

The pending departure of key European figures, like German chancellor Angela Merkel, could usher in less market and EU-friendly successors, Mr McQuaid said.

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