Ibec predicts Irish growth of 1.8%

The Irish economy will grow by 1.8 per cent this year up from 1.2 per cent in 2012, the Irish Business and Employers Confederation has predicted.

In its latest Quarterly Economic Outlook, the employers' group said it expects to see a "turning point" for the Irish economy during 2013. The group predicts economic growth of 1.8 per cent over the course of the year, slightly higher than the latest Government forecasts.

The business lobby group said an improvement in Ireland's sovereign debt prospects should lead to a rise in consumer sentiment this year. The group also predicted goods exports to regain momentum as the euro zone recovers during the second half of the year, with services trade driving overall export growth of 4 per cent.

"We are edging towards a deal on Irish bank debt, which could provide a much needed boost in consumer sentiment. Exports continue to perform strongly," Ibec economist Fergal O'Brien said.

"Exports continue to perform strongly, despite difficult trading conditions. Importantly, we're seeing more businesses successfully making the transition from domestic sales to exports, and progress continues in developing new markets. This will lead to new job creation," he added.

Ibec expects the Consumer Price Index to increase by an average of 1.5 per cent this year and estimates inflation of less than 2 per cent in 2014.

Ibec also sees unemployment numbers stabilising but remaining at elevated levels. The group predicts that 2012 will be the last year of falling employment, with a return to marginal growth of 0.4 per cent in 2013. A survey conducted by the group also revealed that six out of ten employers expect to freeze pay at 2012 levels.

"Although many Irish households continue to grapple with debt and unemployment, there is growing evidence that 2013 could be a turning point for the domestic economy," said Mr O'Brien.