Growth in exports of just 3% predicted
THE IRISH export sector is set for a challenging year with exports predicted to grow by just 3 per cent over the course of the year, due to ongoing economic difficulties in the euro zone and low levels of exports to emerging economies.
“We’re in for a very difficult 2012,” said John Whelan, chief executive of the Irish Exporters Association, at the launch of its annual review yesterday. With a growth level of less than 5 per cent forecast, Mr Whelan fears it will put additional pressure on public expenditure cutbacks to ensure that debt to GDP benchmarks are adhered to.
Although exports increased by a substantial €8 billion, or 5 per cent, to € 171 billion last year, the rate of growth slowed substantially in the second half of the year, leading to concerns over the outlook for this year.
“We cannot underestimate the challenges ahead for exporters, particularly in the light of continued uncertainty around the resolution of the euro zone debt crises and the fragility of the UK’s economic recovery,” he said.
Of particular concern to Mr Whelan is the limited success of Irish-based companies exporting to the fast-growing BRIC economies (Brazil, Russia, India and China). With fears that Britain and the wider euro zone economy will fall into recession this year, these growth markets will be much more important. “If growth in Irish exports is to be achieved Irish firms must increasingly look at non-traditional markets,” he said. However, in 2011, Irish exports to BRIC countries accounted for just 4 per cent of total exports. Moreover, exports to China actually fell by 3.8 per cent.
Ireland’s poor performance is particularly evident when compared with its EU27 counterparts – in 2011 Irish exports to BRIC countries grew by 5 per cent compared to 22.5 per cent for the EU27.