6% GDP growth forecast by economist

BORD BIA’S Brand Forum, constituting 90 food and drinks companies were given an upbeat assessment of the economy in Dublin last night.

Bank of Ireland chief economist Dan McLaughlin forecast growth of 6% in GDP terms for this year and said strong growth levels would continue in 2005 as well.

Dr McLaughlin said the rising strength of the euro against the dollar could see further postponement of an ECB interest rate hike. While some concerns persist about oil and its impact, the ECB looks to have softened its stance on the need for an early hike in rates, he said.

High euro rates will hit growth, and the threat from the exchange rate was summed up in recent days by ECB president Jean Claude Trichet, who said the rise of the euro against the dollar was a “brutal move” from a European perspective.

Given the standing of the US economy against the euro, no real argument exists to justify this state of affairs, he said.

Overall, he still expects the US to lead and Europe to follow in terms of economic performance. Concerns about the US deficit do exist and dollar weakness may remain, but the economic fundamentals do not justify the current exchange rates, he said.

ECB consumer sentiment figures suggest the consumer here will soon be back to confidence levels not seen since the Celtic Tiger peaked in 2000, he said.

Dr Mclaughlin attended the launch of the Irish Food & Drink Brand Forum Membership Directory.

Brand Forum has a two-year sponsorship from Bank of Ireland worth €200,000. Set up in the autumn of 2000 the forum is a key element in Bord Bia’s marketing programmes.

It provides practical advice to food and drinks firms interested in setting up their own brands and in developing them.

Bord Bia consumer food division senior manager Tara McCarthy said the forum meets four times a year.

Pernod Ricard joint managing director Richard Burrows was keynote speaker at the event.

He spoke about the importance of strong brands and how the promotion of Jameson by Pernod has resulted in major international gains for the brand internationally.