Ibec Economic Outlook Q1 2020
Ibec, the group that represents Irish business, today published its new Quarterly Economic Outlook Q1 2020, which forecasts GDP growth of 3.7% in 2020. The Outlook says that the Irish economy has continued on its strong growth trajectory, evidenced by recovering consumer sentiment and business confidence in the early part of 2020. Consumer spending, employment and investment are all growing rapidly, while household incomes are now increasing in every region.
This momentum in growth is being achieved despite external pressures in the global economy, with Brexit posing an ongoing challenge and the impact of the coronavirus outbreak being felt via global supply chain disruption and reduced demand over recent weeks. Sustaining growth is therefore dependent on managing change in the external environment.
Commenting on the report, Ibec Chief Economist, Gerard Brady, said: “All initial indicators suggest the Irish economy has continued its strong growth trajectory into the early part of 2020 despite the continued threat of a hard Brexit. Employment growth has continued its rapid pace. Consumer sentiment and business confidence have both bounced back following a muted end to 2019. While the outlook for Ireland remains positive, conditions for our major trading partners are less favourable. Annual growth for the EU was just over 1% last year, the lowest rate since 2013, on the back of a difficult year for manufacturing. The potential for an escalation in US tariffs applied to EU goods this year, along with the reduction in global growth from a slowdown in China, each pose an additional risk to growth in our key trading partners.
“Domestically, congestion and quality of life issues remain key challenges, with successful delivery of housing, transport and affordable childcare vital to attracting more people into the workforce and easing an increasingly strained labour market. In the wake of the general election, the electorate has spoken. No matter what the composition of the next Government, voters’ expectations that the new Dáil will implement effective solutions to societal challenges have increased substantially. This will require a renewed form of Social Dialogue among key stakeholders and a new Commission on Taxation.
“In 2020, the year for the economy will be bookended by the impact of the coronavirus on global demand and, toward the end of the year, by the increasingly likely spectre of a hard Brexit. In between, we are likely to see major change to global corporate tax rules and an election in the US. Fortunately, the strong momentum in the Irish economy indicates that Ireland is well positioned to weather these headwinds if the resources of several years of sustained growth can be effectively deployed to manage change.”