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MNI POLICY: Ireland Growth To Slow, Inflation On Track - BoI

By Luke Heighton
     FRANKFURT (MNI) - Ireland's growth should slow over the coming two years as
subdued international trade, weakening demand and Brexit fears take their toll
on the economy, although inflation will continue to beat the projected euro area
average, the Central Bank of Ireland said.
     GDP growth is expected to drop from 6.1% in 2019 to 4.8% in 2020, and to
4.2% in 2021 even if a UK-EU trade deal is agreed, the Central Bank of Ireland
said. But the HICP inflation rate will rise from 0.9% in 2019 to 1.4% in 2020
and 1.8% in 2021.
     Growth in Ireland's underlying domestic demand is expected to fall by 0.75
percentage point to 3.75% this year, slipping to 3% in 2021, the Bank said.
Personal consumer expenditure is anticipated to fall from 3.3% in 2019 to 2.2%
in 2021.
     Growth in 2019 was helped by "exceptionally strong" export performance from
pharmaceuticals, chemicals, and computer processor manufacturers, while services
remained strong, the central bank's first Quarterly Bulletin of 2020 concluded,
though growth in other export categories was more "modest," and export growth to
the UK remained relatively flat.
     Employment growth, which has strengthened considerably in recent years, is
expected to slow, with a "modest" decline in the unemployment rate - from 5.0%
in 2019 to 4.7% in 2021 - also expected.
     Mark Cassidy, Director of Economics and Statistics, described the outlook
for economic growth as "broadly positive," with underlying economic activity
continuing to grow at a relatively solid pace in coming years.
     But the pace of that expansion is likely to moderate even in the event of
an EU-UK trade agreement, he said, adding that such an outcome was "not
     "Economic growth in Ireland has remained remarkably resilient in recent
years in the face of significant headwinds," Cassidy said.
     "Looking ahead, the key role of public policy should be to underpin
stability by dampening potential volatility and enhancing the economy's
resilience to withstand shocks."
--MNI Frankfurt Bureau; +49-69-720-146; email:

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