‘Celtic Kitten’ begins to purr but the trickle-down is slow

The Dublin region will see substantial growth rates in the coming years –matching the economic surge of the ‘pre-bubble Celtic Tiger’ era, but leading economists are struggling to find a new moniker for this new and milder economic beast —with suggestions so far including ‘the Celtic Wolfhound’ and ‘the Celtic Kitten’.

However, experts warn that the ‘trickle-down’ of this economic windfall will take some time to fully reach other regions.

Austin Hughes, chief economist at KBC Ireland, said he will likely increase his outlook from a growth rate of 4.5% this year and the rate of 3.8% for 2016, when the CSO publishes GDP data later this month.

“What we do know is the economy has had a very strong trajectory and it is becoming more broadly based,” said Mr Hughes. “You can quibble whether it will be as high as 5% — but the broad message is relatively strong growth.

“We are moving toward a new phase — it won’t be a Tiger economy but there is probably a competition among economists to get the catchphrase to describe the Irish economy that captures an altogether more mature creature, which hopefully has learned from its mistakes.”

The regions have been slower to benefit, but there are emerging signs that economic benefits are starting to “trickle down”, as house prices in Dublin moderate, economists say.

Philip O’Sullivan, chief economist at Investec Ireland, said that he, too, may increase his growth forecasts because the momentum appears to be building.

Meanwhile, Conall MacCoille, the chief economist at Davy Stockbrokers, said that the recovery was displaying elements of the virtuous “pre-bubble Celtic Tiger economy”.

“Pharmaceutical exports are really increasing strongly and the IT sector continues to invest, and then you have food — Irish food and beverages production has risen 10% in the first part of the year,” Mr MacCoille said.

Fergal O’Brien, chief economist at business group Ibec, now has the highest growth predicitons of all the main forecasters. Ibec projects that the economy will grow very strongly this year, by 5.3%.