Irish economy double EU average

The Irish economy is forecast to outpace the average.
PricewaterhouseCoopers (PWC) have issued their latest economic analysis and it shows Ireland’s expected GDP growth rate for 2006 to be around 4.75%. This is more than double the Euroland average of 2%. Average Irish GDP growth for 2007 is expected to be even higher around 5%, compared to Euroland average of 2%.

Domestic demand is expected to be the main focus of economic growth in Ireland, with high and swift consumer spending being underpinned by both strong employment growth and maturing special savings plans. PWC expect that investment in housing to decline over the forecast period, but only gradually and with business investment compensating that sector.

On the down side PWC suggest that Irish wage increases will likely outpace productivity and erode competitiveness of Irish exports while import growth is projected to accelerate in 2007 in line with the pick-up in consumer spending.

The main risks to the scenario are further appreciation of the euro against the US dollar and a sharper-than-expected downturn in the Irish housing market.

The table below sets out PricewaterhouseCoopers main scenario for European economic growth for 2006 and 2007:

Key findings from the survey

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The table below sets out PricewaterhouseCoopersmain scenario for European economic growth for 2006 and 2007:

Outlook for European GDP growth (%)

Country/region	2005 Est	Main Scenario
		2006	2007
Germany	0.9	1.5	1.25
France	1.6	2	2
Italy	0.1	1.25	1.5
Spain	3.4	3	2.75
Netherlands	0.8	2	2
Ireland	4.4	4.75	5
Euroland	1.5	2	2

UK	1.7	2.25	2.5
Sweden	2.7	3.25	2.5
Switzerland	1.8	2	1.75
Other Western Europe	3.2	2.5	2.25
Western Europe	1.6	2	2
Poland	3.3	4.25	4.5
Hungary	4.2	4.5	4
Czech Republic	5	4.25	4.25

Source: PricewaterhouseCoopers; PwC growth scenarios for 2006and 2007 are rounded to the nearest quarter of one percent

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Irish economy double EU average