Global investment bank Cantor Fitzgerald is the latest financial body to weigh in on the Irish economic recovery with strong 2015 growth projections.
Cantor Fitzgerald is projecting full-year GDP growth of 3.5% in line with predictions from the European Commission and IMF made earlier this year.
The key factors influencing the bank’s outlook for the year are the dual forces of the ECB’s €60bn quantitative easing programme and the continuing fall of the value of the euro.
“The actions of the world’s leading central banks during the first quarter of 2015 created a tectonic shift in the landscape facing investors,” it said.
“The weakness of the euro has buoyed the European economy; boosting exports and corporate profits as goods from the eurozone become ever cheaper on global markets,” said Cantor Fitzgerald senior investment analyst David Donnelly. “The rapid decline in the euro is hugely supportive of corporate earnings in the eurozone.”
Given that 44% of Eurozone GDP is accounted for by exports, a weakening euro makes products produced here cheaper in foreign markets, thereby boosting sales.
Cantor Fitzgerald’s projections also predict the US economy strengthening further this year with growth of 3% — an increase on the 2.4% seen in 2014.
Similarly, the UK economy is forecast to expand at the same rate of last year at 2.6%. The economic outlook report singles out the potential Greek exit as the major risk facing the eurozone.
“The primary issue which could potentially derail the positive trajectory that Europe is currently on is the unresolved nature of Greek funding,” the report reads.
Talks between the Greek prime minister’s government officials, including finance minister Yanis Varoufakis, have shown little signs of progress since a deal struck in February bought the sides more time to thrash out a deal.
A meeting of Eurogroup ministers on May 11 is the deadline which has been set for agreement to be reached.
The following day a €774m repayment is due to be made to the IMF — the biggest single payment of the €977m amount due to be repaid next month.
© Irish Examiner Ltd. All rights reserved