GDP growth forecast to reach 0.2%

GDP growth is forecast to reach 0.2% this year and 0.9% next year, although GNP is expected to shrink by -0.6% in 2012 and remain flat in 2013, according to Davy Stockbrokers.

Davy’s chief economist Conall MacCoille says the economy is stuck between contracting domestic demand and growing exports. He sees exports rising by 2.6% this year and 3.2% next year. However, domestic demand is expected to fall by -2.2% in 2012 and -0.6% in 2013. Investment is forecast to decline by -2.1% this year before rebounding to 1.3% growth next year.

Moreover, there are signs that most sectors of the economy are stabilising. Average weekly earnings are down between 6%-9% since 2008. The unemployment rate is at a stubbornly high 14.8%, but private sector employment has stopped falling and the bulk of job losses in the private sector have been completed.