Quarterly Economic Commentary, Spring 2014

Economic growth is expected to remain strong in 2014 and 2015, with GNP of over 3.5 per cent forecast in both years, according to the latest analysis in the ESRI   Quarterly Economic Commentary.

The continuing improvement in the current account of the balance of payments and the rapid growth in employment point to a continuation of the recovery into 2014 and 2015. There are signs of growth in private investment and, as this trend develops, it will contribute to further growth in output and employment.

In our view, GNP continues to provide the best measure of the standard of living (and output) of Irish residents. We are expecting growth in GNP in 2014 of 3.5 per cent and that this pattern will continue into 2015, resulting in growth in GNP next year of 3.7 per cent.
A consequence of this significant growth in output and employment will be a further fall in unemployment. The unemployment rate should be down to an average of 10 per cent of the labour force in 2015.

Based on the forecast in this  Commentary , government borrowing in 2015 is likely to come in below the target (3 per cent of GDP), even without the substantial further cuts envisaged for the 2015 Budget. However, there still remains the possibility of new shocks to the economy and so, in formulating fiscal policy, we suggest that it is best to err on the side of caution to ensure that budgetary targets are met in 2015. After a long period of attrition, we are approaching the end of the very painful period of fiscal adjustment.

Notes for editors:
1.  The  Quarterly Economic Commentary, Spring 2014,  by David Duffy, John FitzGerald, Kevin Timoney, and David Byrne (ESRI), will be published online on the ESRI website on Friday 11 April.

2.  This  Quarterly Economic Commentary (QEC)  includes the following  Special Articles * and  Research Notes **

•  "A Survey-based Analysis of Irish Savings Behaviour by Age", by Kevin Timoney, ESRI Research Note No. 2014/01/01, (to be published online 10/04/14).
•  "Alternative Scenarios for New Household Formation in Ireland", by David Duffy, David Byrne and John FitzGerald,  Special Article  in the  Quarterly Economic Commentary , Spring 2014, (to be published 11/04/14).
•  "The Structural Balance for Ireland", by Adele Bergin and John FitzGerald  Special Article  in the  Quarterly Economic Commentary , Spring 2014, (to be published 11/04/14).

For further information on the QEC please contact:
David Duffy (Senior Research Officer, ESRI),   +353 1 863 2113,   david.duffy@esri.ie,
John FitzGerald (Research Professor, ESRI),   +353 1 863 2117,   john.fitzgerald@esri.ie,
Kevin Timoney (Research Assistant, ESRI),   +353 1 863 2095,   kevin.timoney@esri.ie
David Byrne, (Research Assistant, ESRI),   +353 1 863 2045,   david.byrne@esri.ie

* Articles are published in the  QEC  in order to foster high-quality debate on various aspects of the Irish economy and Irish economic policy.   More information on Special Articles.

**Research Notes are short papers on focused research issues. Ends
ESRI Press Office,   353 1 8632000;   press@esri.ie