Davy predicts 'dramatic turnaround in Ireland’s fortunes'

Ireland is set for a robust recovery next year, according to stockbroking firm Davy.

The company is predicting GDP growth of 2.5%in 2014, pointing to "a range of indicators".

Davy also claimed that a re-rating of Ireland’s credit worthiness by Moody’s is "inevitable".

Analysts pointed to a re-rating of Irish stocks in 2013, a four-fold increase in IPOs and increased international appetite for capital raisings by Irish corporates as signs that international institutional investors are betting strongly on an Irish recovery.

Davy has also provided the names of the ‘Tier 1’ global investors who have amassed substantial holdings in Irish equities, debt and property.

"Ireland is on track for a far more robust recovery than is evident from economic data that is distorted by the Pharma patent cliff which has little material impact on employment or the real economy," said Davy chief economist Conall MacCoille.

"Key indicators of a dramatic turnaround in Ireland’s fortunes include: four consecutive quarters of employment growth, expansion of the services sector and a much earlier than anticipated recovery in construction and industry.

"Davy is predicting that 2013 will mark Ireland’s first full calendar year of expansion in GDP (+1%) since the recession began and that GDP growth in 2014 will bounce back to 2.5%.

"The biggest risk to a sustainable recovery is that public spending remains stubbornly high and that a combination of our exit from the bailout and an election in 2015 may mean reduced fiscal discipline, thereby locking Ireland into a high tax, high spend economic cycle."