Investec says it is ‘no longer’ anticipating election in 2017

Stockbroker says incentive for opposition to bring down administration has reduced

Dublin stockbroker Investec says it was no longer anticipating a general election this year with opinion polls predicting another hung Dáil.

In its latest economy monitor, the firm said the incentive for the Opposition to bring down the minority administration had reduced.

“In any event, given that most Irish politicians hug the middle ground, we wouldn’t envisage meaningful policy changes were fresh elections to be held,” it said.

The brokerage noted Ireland was the fastest-growing economy in the European Union for the third successive year with gross domestic product (GDP) expanding by 5.2 per cent.


Favourable effect

It said the growth in the second half of last year was particularly strong and this is likely to have a favourable effect on the level of GDP this year.

As a result, it raised its growth forecasts to 4.6 per cent for 2017 and 4 per cent for 2018.

While noting the 39-month sequence of unbroken annual growth in headline retail sales came to an end in February 2017, it said this outturn was skewed by weak new car sales on the back of competition from sterling dealers. It also said non-motor retail sales were still up 3.3 per cent in volume terms.

The report said housing, or rather a lack of it, was “by a distance the key issue in the Irish economy at this time”.

Investec said that while housing output has increased, it was currently only enough to meet about 60 per cent of the “flow” of new household formation, without putting a dent in the “stock” of unmet accommodation need.

Lead indicators, such as planning permissions data and the housing component of the Ulster Bank Construction survey, suggest that it could be the end of the decade before the gap between supply and demand was closed.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times