Davys downgrades growth forecast for 2004

Davy Stockbrokers has downgraded its growth forecast for this year to 3.4% from 3.8%, due to higher than estimated accumulation of stocks in the economy.

In its latest report on the Irish economy, the stockbrokers said it also expects growth to slow to 2.6% next year because of an easing of the pace of growth in the global economy.

Davy is more positive on the jobs front and has cut its forecast for the unemployment rate from 6% to 5% this year, following better than expected employment figures from the CSO last month.

Regarding public finances, Davy believes that Exchequer borrowing will come in €1bn below the €2.8bn budget target, boosted by buoyant revenues and a windfall from tax on offshore accounts.