GDP ‘to grow 2% on back of rising exports’

GDP will grow by 2% this year and 2.4% next year on the back of rising exports and the first increase in consumer spending since the recession began, according to the EY Economic Eye.

The report expects consumer spending to rise by 1.7% this year, the first expected rise since 2008.

“Ireland is showing the characteristics that are required to put the economy back on a robust footing and this has been recognised by the international financial markets, which have differentiated Ireland from the ‘Club Med’ countries, as illustrated by the recent fall in bond yields,” said Professor Neil Gibson, economic advisory to EY Economic Eye.

“However, & continued recovery is by no means assured, with a number of valid concerns including fragile consumer confidence, continued difficulties in the banking sector and limited private sector lending, potential pent-up repossessions in the housing market and the uneven pace of recovery in the regions outside Dublin.”

Exports are forecast to grow by 3.7% this year following two relatively sluggish years on the back of the patent cliff in the pharmaceutical sector. But the improvement in the UK and US economies are seen underpinning exports this year.

Household incomes and wages have not recovered from the crash, when adjusted for inflation.

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