Be optimistic… and cautious - Economic forecasts

It is an indication of how provocative and divisive the entire Irish Water/water charges debacle has become that it will continue to dominate public discourse despite yesterday’s European Commission prediction that Ireland is on course to be the fastest growing economy in Europe this year.

After seven years of relentless drudgery, cuts and, for the great majority of people, falling incomes, this should almost be the long-awaited moment when the champagne cork is popped.

The commission anticipates gross domestic product (GDP) growth of 3.6%, and that the economy will grow by 4.6%. This optimism must be tempered by more sober predictions for other eurozone economies. The commission has cut its predictions of eurozone growth to 1.2% rather than the 1.7% predicted earlier. Putting our performance, albeit from a pretty unattractive starting position, in an even more flattering light is the prediction that growth in Germany, France and Italy is expected to slow — Germany’s forecast has been cut to 1.1% from the 2% predicted six months ago.

These predictions, but only if they are made real, will offer Government opportunities they only dreamt about two years ago. That this lift may come just as an election hoves into view must be another fillip for a battered, bruised and tottering administration. It would however be criminally childish to use this unexpected U-turn to drop water charges.