The outlook is for a modest slowdown in growth this year relative to earlier expectations - Publication of Quarterly Bulletin 4

• Forecasts broadly unchanged from previous Bulletin, with modest downward revision to growth
• Estimated Brexit effects on economic forecasts are unchanged
• Domestic factors set to be main drivers of growth with risks mainly from external factors

The Central Bank has published the fourth Quarterly Bulletin for 2016.  The Bulletin examines recent trends in the domestic and international economies, as well as presenting the Central Bank’s forecasts for the Irish economy and its views on domestic macroeconomic policy issues.

The Bulletin reports:

• Irish GDP is forecast to grow by 4.5 per cent this year, reflecting a reduced contribution from exports and some moderation in growth of domestic demand.
• The uncertainty surrounding the trading arrangements which will emerge when the UK triggers Article 50 makes it challenging to estimate the impact on the Irish economy.
• Consumer spending grew strongly in the first quarter but declined in seasonally adjusted terms in the second quarter.

Chief Economist Gabriel Fagan said “A wide range of domestic spending and activity indicators suggest that Irish economic activity continues to expand at a healthy pace, though growth momentum may have slowed slightly over the first half of the year…The initial fears in relation to the impact of Brexit on the UK economy have given way to a less pessimistic assessment in recent months, against the background of some more positive UK economic data and an accommodative policy environment.  While this leads to the judgment that it is not appropriate, at this point, to make a further negative Brexit adjustment to the forecasts, the potential for adverse macroeconomic, financial and currency market effects to quickly re-emerge remains.  In such circumstances, risks to the latest forecasts remain clearly tilted to the downside”

The Bulletin also contains an overview on its YouTube Channel on the outlook for the economy as follows:

Gabriel Fagan, Chief Economist discusses the outlook for the Irish economy

Fergal McCann, Senior Economist discusses his signed article “Rental markets, savings and the accumulation of mortgage deposits”

The full Bulletin and signed articles are available here.