GNP to grow 2.7%, expert forecasts

GNP growth of 2.7% has been forecast by Robbie Kelleher, head of research for Davy, who spoke at the first joint seminar between ACCA Ireland Financial Services Network and the Securities and Investment Institute.

He said that although the economy remained buoyant in the first half of 2007 and the latest labour market figures show employment growing by 3.9%, there was a still a sense of “doom and gloom” due to a major adjustment in the housing market amid concern for the international economy.

“Our forecast assumes that [housing] completions will fall to 55,000 in 2008 and this will represent a cumulative fall of nearly 40% over two years in the volume of housing output.”

However, he said that “as liquidity in the second- hand housing market dries up, there is likely to be an increased spend on home improvement” and public capital spending was forecast to increase 16%.