Ireland should outpace eurozone but faces threat from high oil prices

IRELAND should continue to outperform the eurozone average but sustained high oil prices will hurt economic growth, financial services firm PricewaterhouseCoopers (PwC) said yesterday.

The firm’s European Economic Outlook, published yesterday, said Irish GDP growth would be in the region of 4.5% this year and 5% in 2005, far outpacing the eurozone averages of 1.75% and 2.25%.

PwC economist Rosemary Radcliffe said world economic growth would hit 4% this year, driven largely by a strong performance in America. But she warned that there were clouds on the American horizon that were caused by high levels of debt among both corporates and households. The American budget deficit was now approximately 5% of GDP, which was significantly higher than the 3% ceiling faced by European governments under rules underpinning the euro.