ESRI: growth outlook precarious

The next seven years may see an economic recovery take hold, triggering a virtuous circle of growth and debt reduction, or the economy could stagnate unleashing a vicious circle of rising debt and unemployment, the ESRI says in its latest medium-term review.

The institute has outlined three economic scenarios that could unfold over the next seven years. The most benign scenario is that the economy recovers, although this would see GDP growth only reaching 2.2% by 2020.

This scenario is predicated on an international recovery, which would increase demand for exports. This would increase wage levels and in turn boost domestic demand.