Building houses to boost ‘real’ growth here, EU forecasts

Building houses will make a significant contribution to “real” investment in the economy this year, even as the true picture of growth here continues to be affected by the activities of the multinationals, the EU has said.

In its new spring forecasts, the EU increased its projections for GDP growth to 4% this year from its February forecast for growth of 3.4%. It projects GDP will grow 3.6% in 2018, up from 3.3% in that earlier forecast. The new 2017 projection is only a little under the 4.2% growth forecast by the Government.

It also warned the Government’s fiscal outlook, based “on the expectation of relatively robust increase in tax revenue and buoyant current primary expenditure amid public wage pressures” is vulnerable to external shocks. But despite concerns for Irish growth prospects from Brexit and US tax and trade policies which it again flagged, the EU said the economy has performed better than it expected because unemployment has fallen at a fast pace. Employment will continue “to be positive as well” through 2018.