Evidence suggests Irish economy is slowly recovering
Analysis: Growth will be primarily due to exports as domestic demand sluggish
“Unemployment (both short- and long-term) began to fall towards the end of last year. If our forecasts prove to be correct, then this means an annual average below 300,000 unemployed in 2014.” Photograph: Frank Miller
In the ESRI’s latest outlook for the Irish economy, we forecast that growth will improve in 2013 and 2014. If we are right, growth, as measured by GNP, will amount to 1 per cent this year and 1.5 per cent in 2014. The corresponding growth rates for GDP are 1.8 and 2.7 per cent. As has been the case over the past number of years, this growth will be primarily due to increasing exports and we expect that this export growth will continue to be driven predominantly by the service sector. We are currently forecasting that domestic demand will grow by around 0.7 per cent in 2013 and 2014.
If the growth rates we forecast are realised, what will they mean for the Irish economy? One of the main impacts of the crisis has been a sharp increase in the numbers unemployed. We would expect to see some reduction in the unemployment rate to an annual average just below 14 per cent in 2014. Indeed, unemployment (both short and long term) began to fall towards the end of last year. If our forecasts prove to be correct, then this means an annual average below 300,000 unemployed in 2014.