EU sees Irish economy growing slower than eurozone this year after avoiding recession in 2020

EU Commission's new winter forecasts suggest Irish GDP will grow 3.4% this year compared with expansion of up to 3.8% for the eurozone and the EU

European Commission President Ursula von der Leyen. Picture: AP Photo/Francisco Seco

The Irish economy will grow this year but at a slower pace than the rest of the eurozone and EU, after escaping recession in 2020, according to the EU Commission.

Its new winter forecasts suggest Irish GDP will grow 3.4% this year compared with expansion of up to 3.8% for the eurozone and the EU. 

However, in its country-by-country commentary, the commission noted that Ireland was the only EU economy to grow its GDP last year, thanks in part to exports by the pharma multinationals during the pandemic. 

The forecasts don't say much about the outlook for unemployment and it is well-known that GDP is a wildly misleading measure for the economy here. 

Many economists have warned that unemployment will be higher for longer in Ireland because of the slow roll-out of the vaccines and the need for prolonged lockdowns to contain the pandemic. 

Nonetheless, the EU also pointed to the large amount of savings that could boost recovery once restrictions are lifted. 

And after falling last year, the EU said Irish prices as measured by its harmonised index will tick higher this year.