Analysts bullish on growth prospects

Financial analysts are bullish about the prospects for the Irish economy, according to a survey by Chartered Financial Analysts’ Society Ireland.

Nearly half of all those surveyed expect the Irish economy to grow this year, while the number of analysts expecting the economy to shrink has fallen dramatically.

Only 9% of analysts are predicting that there will be a downturn in the domestic economy, down from more than 20% in December.

Taking a longer view nearly 60% of respondents believe there will be growth in the next five years.

Analysts expect 20% of growth in the period to be driven by investment and only 17% by consumption.

CFA president Ronan McCabe said it would appear that external factors will be driving growth.

“This suggests that most investment analysts believe that growth in domestic consumption in the next five years is going to be driven by exports,” he said.

There are external risks to the Irish growth story. More than 40% of analysts believe that the end of central bank quantitative easing is the single biggest risk to global capital markets, followed by concerns over Chinese growth and eurozone debt concerns.

The analysts were positive about the prospects of Irish shares — 35% expect the Irish stock market to outperform global stock markets in the second half of 2013, more than double the number who expected an Irish equity out-performance in the Dec 2012 survey, while 50% expect the Irish stock market to perform in line with global markets.

There are mixed views on the prospects for the Irish bond market, with 37% expecting Irish bonds to outperform global markets, with 26% expecting an under-performance.