Celtic Tiger II: experts predict 15-year boom

THE economy is set to experience another 15 years of booming growth, according to a new report.

In the bullish report, entitled 2020 Vision - Ireland's Democratic Dividend, NCB Stockbrokers forecast the economy will grow 5.75% for the next five years and ease somewhat to 5% for the following five years.

By 2020 the population will have surged to 5.3 million from 4.1m, an increase of 30%. By 2050 it will have grown to six million.

The report says the rise will be fuelled by the baby boomers of the 1970s as well as the inflow of migrants, who should account for 20% of our 5.3m population by 2020.

While the brokers see an easing in housing demand from 80,000 homes per year it says underlying demand, partly driven by the inflow of non-nationals, will require 65,000 homes per year to be built out to 2020.

The brokers also forecast the number of cars on our roads to double to 3m during the period.

In the longer term the biggest factor affecting the economy will be an aging population. Projecting out to 2050, the over-65s will account for 1.7m of the six million citizens in the State, or 30% of the population.

NCB chief economist Dermot O'Brien said the implications of that for servicing of the state pensions and for care of the aged will be massive.

In a separate report, Friends First chief economist Jim Power said the economy was like a bird "flying on one wing".

"A significant correction to house prices would have a substantial negative wealth effect on consumer confidence and would undermine the overall economy," he said.