Economy on target to deliver 55,000 new jobs this year

The Irish economy is on target to create 55,000 additional jobs this year and a further 50,000 in 2018, according to updated forecasts from the Department of Finance, bringing the unemployment rate well below 6 per cent.

The department said the economy was growing strongly, but warned that the threat of Brexit and a changed policy stance in the US meant that “a continuation of robust economic expansion cannot be taken for granted”.

The forecasts, which are contained in the updated draft stability programme which will be submitted to the European Commission, confirm that the official GDP growth forecast for this year has been increased to 4.3 per cent, from 3.7 per cent at the time of the last budget. For 2018 a growth rate of 3.7 per cent is projected.

The document says the key goal of budget policy is to improve the “resilience” of the economy so that any adverse developments can be absorbed “with minimal fallout”.

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The documents forecast that Ireland will meet its borrowing forecasts of reducing the structural budget deficit to 0.5 per cent of GDP by next year. This assumes that growth meets forecasts and that the scale of tax cuts and spending increases in the budget are in line with what was envisaged in earlier plans.

The department will finalise its pre-budget forecasts, including the amount of money it will have to spend on Budget Day, in a summer economic statement. Prior to that, Minister for Finance Michael Noonan will present the latest forecasts to the Dáil Committee on Budget Oversight on Thursday.