Central Bank reports signs of economic recovery

The Central Bank has reported signs of improvement in the international economy and a corresponding economic recovery in Ireland.

In its latest quarterly bulletin, the bank said it expected GNP growth for 2003 to be around 2.25% and GDP growth to be around 1.75%.

It also welcomed the recent decline in the annual inflation rate, but warned that high inflation over the past few years had eroded Ireland’s competitiveness.

The Central Bank said competitiveness had deteriorated by 14% since the country joined the

European Monetary Union in 1999 and that prices in Ireland were now 12% above the EU average.

The Central Bank’s quarterly bulletin also expressed concern about swings in the exchange rate of the euro and the adverse effects they could have on Irish competitiveness.

The bank said a high proportion of Ireland’s external trade was with countries outside the

euro-zone, mainly the US and Britain.