Ibec raises forecast

The Q1 Economic Outlook from Ibec has forecast 5.4 per cent growth in Irish GDP in 2015 – up from its previous estimate of 4.8 per cent. Favourable exchange rates, quantitative easing and lower oil prices are expected to strengthen growth with unemployment (currently 10 per cent) falling below 9 per cent this year.

“Economic growth will in time translate into pay increases across the economy,” said Ibec Chief Economist Fergal O’Brien (pictured), “but different sectors and companies are recovering at different rates. Two-thirds of domestic services companies and half of traditional manufacturing companies are unable to afford pay increases this year.”

Quantitative easing has led to a “dramatic fall” in the value of the euro which, in turn, is a major bonus for exporters. O’Brien added: “Ireland will benefit more than any other euro zone country because of the high level of trade with the UK and US but the increased cost of some imports will offset a portion of the benefits.” Higher import costs are also likely to feed through to consumer prices over the coming months.