NIB predicts 3.9% growth this year

Ireland's economy will grow at 3.9 per cent this year buoyed by strong growth in services exports, according to the latest National Irish Bank (NIB) Quarterly Economic Report.

And despite surveys of consumer confidence appearing unusually pessimistic, the author of the report Dr Ronnie O'Toole, chief economist at NIB said "Ireland's economic growth in the third quarter was one of the highest in the OECD".

He expects employment growth to slow significantly but that the economy would generate an additional 40,000 jobs this year.

Dr O'Toole said, "The economic pessimism has been overdone. The fall in construction in 2008 will be offset by strong exports in services, with a rebound in economic growth during the second half of the year."

"The unheralded economic success in 2007 was the resurgence in exports, which happened despite the strength of the euro."

With the European Central Bank meeting on Thursday, Dr O'Toole said the future direction of interest rates "remains on a knife edge", adding that the prospect of a cut in interest rates in the next few months is remote.