Ibec, the group that represents Irish business, welcomed the National Accounts figures published today by the CSO, which suggest Ireland’s economy is on track to record growth in excess of 7% this year. Consumer spending which is the best measure of the benefits of growth to households is also set for significant growth of 4.5% in value terms in 2018.
Ibec Head of Tax and Fiscal Policy, Gerard Brady said: “Today’s numbers show that the Irish economy remains in a very strong position despite the external backdrop. GDP growth in excess of 7% is based on strong domestic activity with the volume of domestic demand up by almost 5%. It is clear also that growth is benefitting consumers with household spending up 4.5% in value terms.
“Feedback from our members, however, suggests that many sectors are facing a more difficult period in the months ahead due to the weak Sterling and continued Brexit uncertainty. In the run-up to Brexit it was inevitable companies would hold back investment decisions until there is a clearer understanding of what the final relationship between the EU and UK will look like. Feedback from Ibec members suggests that this weakening in SME investment has accelerated over recent months due to heightened uncertainty and squeeze on margins due to Sterling weakness. Many companies are also currently implementing very costly contingency measures such as holding higher stock levels. It is crucial that Government now seeks to ramp up no-deal planning by putting further supports for enterprise stabilisation, cashflow and diversification in place.
“We expect that the economy will continue to grow strongly in 2019, however, this growth will be somewhat weaker than recent years as we are now at a mature phase of the business cycle with the economy close to capacity. These forecasts are based off the assumption that an agreement on Brexit is reached. If this does not happen, 2019 will be significantly more challenging.”