Quarterly Economic Outlook Q2 2021
The economy is set to emerge strongly from the COVID crisis with Ibec’s Economic Outlook for Q2 2021 forecasting an increase in GDP of 6.5% in 2021. The first half of the year has seen the export engine of Ireland’s economy continuing to fire and a level of normality is now returning to most domestic sectors.
Despite the comparatively poor performance of domestic sectors in the first quarter of the year, there are signs of light on the horizon, with credit and debit card data and strong VAT returns for March and April indicating the potential for a rapid recovery in consumption. This, in conjunction with positive improvements in employment as sectors reopen, shows an economy well placed to see a rapid recovery in activity as the vaccine is fully rolled out.
As we emerge from COVID, Ireland’s most significant challenge will be to ensure future growth is sustained and sustainable. Ireland faces some unique challenges in the post-COVID era. We have obvious long-standing infrastructural deficits, significant Government policy commitments in areas like health, pensions and the labour market and hugely ambitious climate targets to meet. We are also facing threats to our business model from global corporate tax change. All of these will have challenging implications for economic growth, business competitiveness and tax revenues in the months and years ahead.
Ibec has called for a renewed focus on greater fiscal and competitiveness discipline to ensure resources continue to be available and used strategically to fix priority economic challenges such as infrastructure, housing, population ageing and climate change.
Listen to a short summary of what business needs to know in Ibec’s Economic Outlook for Q2 2021 from our Chief Economist Gerard Brady.