Unemployment ‘to fall to 12.5% by 2014’

Ireland’s unemployment rate could fall to 12.5% by the end of 2014, although it is still likely to remain in double figures for a number of years, according to Merrion Stockbroker’s latest quarterly economic outlook.

Unemployment has gradually reduced from over 15% to around 13.5% in the last two years and the first two quarters of 2013 saw net employment increases of 20,500 and almost 34,000, respectively.

“Unlike the opening quarter of 2013, the bulk of the annual increase in the April-June period was in full-time rather than part-time jobs,” noted Merrion’s chief economist, Alan McQuaid.

Merrion is forecasting unemployment to drop to 13.5% by the end of this year, from a 14.7% average last December. It expects the rate to fall to 12.5% by the end of next year and to 11.5% by the close of 2015.

Earlier this week, the ESRI said it sees the unemployment rate coming in at 13.6% at the end of 2013 and falling to 13.1% by the end of next year.

Merrion maintains there will be 0% GDP growth this year; before gains of 1.5% and 2.5% in the next two years. GNP, it said, will grow by 1% this year before rising by 1.5% and 2% in 2014 and 2015.

This year’s average inflation rate is likely to be around 0.6%. Merrion also expects the deficit to be 7.3% of GDP by the end of 2013